Superdry today revealed an expected £10 million lower profit warning for its full year performance ending in April 2019, blaming the long hot summer, warmer than usual early autumn weather and foreign exchange rates, combined with weak consumer confidence.
As a result, shares in the company were down 20% at 811.50p each early this morning. The heavily branded clothing retailer said it will record £8 million in additional foreign exchange costs, split evenly across the financial year, as historic exchange hedging mechanisms have not provided the expected degree of protection.
Widely known for its outerwear, sweatshirts and hoodies, the FTSE 250-listed company has come out fighting by accelerating diversification into different product categories, such as dresses, skirts, women’s tops and denim, as well as different market sectors such as premium, sport and licensed products. It also plans to invest £5 million in the second half of the year in brand communication, digitalisation and automation to address changing consumer behaviour.
Superdry Chief Executive, Euan Sutherland, said: “We have confidence in our strategy for growth and so are accelerating investments in our future. There are significant opportunities ahead for Superdry in terms of geographical market expansion, category extensions and growth, as well as the ability to leverage the multi-channel operating model in a digital world to deliver to customers in whichever way suits them best.”
For the first six months to October, the retailer expects to record low to mid-single digit statutory revenue growth. Online sales are expected to rise by mid-single digit, while store revenue is predicted to fall by low-single digit. The company will release its first-half results on 12 December.