​Moss Bros half-year profits flat as sales edge up

The menswear specialist posted flat adjusted profit before adoption of IFRS 16 and before tax in the period covering January 27 to July 27, down £0.2m in comparison with a profit of £0.2m in the same period the previous year.

Pre-tax losses widened to £2.7m in the period compared with £1.7m the previous year, which the retailer primarily attributed to an IFRS 16 impact of £1.1m.

Moss Bros revenue rose 1.4% year on year to £65.4m, as store like-for-like sales increased 0.6% and overall like-for-likes rose 2.9%.

Online sales climbed 20% year on year and now represent 15% of overall sales.

Hire sales, which represented 10.7% of sales during the half, slumped 14.7% on a like-for-like basis, while gross margin declined 0.7% to 55.8%.

Moss Bros said it expected to deliver full-year results in line with expectations but axed its dividend payments in order “to give the business maximum flexibility for investment, while retaining a strong debt-free balance sheet”.

Chief executive Brian Brick said: “Reflecting on our first-half performance, it feels that we are gaining traction in a number of areas. The return to growth of our stores is extremely important to us and we will continue to focus on maintaining this trend.

“The growth which we have seen in stores is set against a backdrop of lower footfall in our stores than last year in most locations in which we operate.

“Our conversations with our landlords are active and ongoing to ensure that we can align our store occupancy costs with the lower footfall which we experience, while continuing to offer store-centric services such as Tailor Me, our custom-made suiting proposition, which continues to go from strength to strength.

“We are acutely aware of the challenges which we face in our Hire business. We plan to invest in a focused way in updated product to ensure that we remain relevant in terms of product offer.

“We are also actively investigating what newer and fresher hire or rental services can be offered to address changing customer requirements as soon as spring next year, while ensuring that we maintain our market-leading position for customers not simply wishing to purchase their formalwear outright.”