Matalan has suffered a drop in second-quarter profit as political uncertainty and “awful” weather during spring dented earnings.
The fashion retailer said EBITDA fell 28.5% year on year to £16.3m in the 14 weeks to August 31. On a post-IFRS 16 basis, EBITDA was £42.8m.
Matalan raked in sales of £292m during the period, up 11.3% year on year.
However, higher levels of discounting required to sell excess stock meant sales growth did not feed through into the bottom line.
Matalan boss Jason Hargreaves said the “extremely tough” trading environment was exacerbated by “awful” spring weather, which held back full-price sales.
Hargreaves said this resulted in “significant margin investment” in order to sell surplus products, but he insisted Matalan “succeeded in doing this effectively”.
Hargreaves said of the wider market: “Ongoing political and economic uncertainty has weighed heavily on consumer confidence and spending.
“We expect the autumn/winter season to remain challenging and are focused on balancing the delivery of growth opportunities against the need to effectively manage stock risk and profitability.
“We will continue to be responsive to current trading conditions and remain confident in the longer-term direction and progress the business is making.”
No comments yet