Superdry profit warning sees shares slide further

The fashion retailer saw its share price take a tumble after it announced a £10 million profit warning ahead of its half-year results next month.

Superdry
Source: Bloomberg

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.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer