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Superdry has seen a lack of demand for its winter coats and jumpers which account for 45% of its annual sales, with the fashion retailer placing the blame on ‘unseasonably hot weather conditions’ across Europe and the US.
The heatwave seen over the first half of the financial year, combined with the challenges faced by some of its trading partners like online retailer Zalando, is expected to negatively impact full-year profits by around £10 million.
‘Superdry is a strong brand with significant growth opportunities, backed by robust operational capabilities, but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,’ CEO Euan Sutherland said. ‘We are well prepared for peak trading, but the second half of financial year 2019 presents both risks and opportunities.’
In the last three months, the company’s share price has steadily declined since one of its co-founders sold a 6.7% stake at £12.85 a share on 24 July, hitting a low of £7.88 a share on Monday.
The company also admitted in its trading update that its foreign exchange hedging practices have not provided adequate protection, adding a further £8 million in forex costs over the financial year.
‘There are significant opportunities ahead for Superdry in terms of geographical market expansion, category extensions and growth and the ability to leverage its multi-channel operating model in a digital world to deliver to customers in whichever way suits them best,’ Sutherland added.
Superdry will announce its first-half year results 2019 on 8 November.