Moss Bros cautions on profits as festive footfall drops

The formal menswear specialist said it now expects full-year pre-tax profit to come in between £6.5m and £6.8m, “slightly below” current consensus, amid a “very challenging” trading landscape.

Moss Bros blamed market “volatility” for an 8% slump in like-for-likes since the start of December.

However, the retailer said this was offset by a 1.2% increase in store sales between August and November.

Across the wider 23-week period to January 6, like-for-like sales inched down 0.1%.

Including ecommerce, total retail sales were up 0.4% on a like-for-like basis and 1.6% in total terms.

Like-for-like hire sales, which comprise 10% of group revenues, slipped 3.6% during the period, although that marked an improvement on the 8.4% slump it suffered a year ago.

Moss Bros said online sales were up 12.3% year-on-year and now accounted for just under 13% of group revenues.

A ’hardening’ competitive environment

Chief executive Brian Brick said: “Having made considerable progress in building a strong, profitable, cash-generative menswear business which has outperformed the market in recent years and despite continued progress throughout much of 2017, we faced a very tough December trading environment, which led to a significant reduction in store footfall and a hardening of the corresponding competitive environment in which we operate.

“This, coupled with strong cost headwinds and a desire to protect margins, led to a disappointing year-end shortfall to sales and subsequently to our anticipated profits for the full year.”

Brick added that the year ahead would be “an extremely challenging one” as a result of consumer uncertainty, the political backdrop and “significant” cost headwinds.

But Brick insisted: “We see the weaker environment as an opportunity to strengthen our core brand proposition and to utilise our strong balance sheet credentials to invest.

“Whilst this will inevitably impact anticipated profits for FY2018/19, we do believe continued investment is essential to ensure we retain a sustainable point of differentiation and that we leverage our niche position on the high street.”