Fashion retailer Superdry is back in the black, helped by the lifting of pandemic restrictions and progress on its turnaround strategy.
Superdry posted full-year adjusted profit before tax of £21.9m, versus a loss of £12.6m the previous year. Total sales climbed 9.6% to £609.6m, ”largely as a result of lapping enforced store closures and lifting of restrictions in our key markets”.
Superdry, which was issuing delayed results for the year to April 30, also reported an “encouraging start” to the new financial year, “particularly autumn/winter trading”.
However it also expressed caution in the short term amid tough trading conditions for retailers and said profits are likely to fall back in the current year.
The retailer increased full-price sales over the last year. Spring/summer sell-through advanced 16 percentage points year-on-year, driven by strength in dresses and shirts. Superdry, which has put sustainability at the heart of its operations, said 47% of product by volume purchased was sustainably sourced – up 14 percentage points.
The reopening of shops after the pandemic was evident in sales. Superdry’s store sales rose 14.3% in the 22 weeks to October 1, while online rose 4.5%.
The company said: “We are experiencing the sector-wide trends of traffic moving away from online and back to stores, a partial reversal of trends seen through the pandemic, although store footfall has still not fully recovered to pre-Covid levels. Encouragingly, and despite the present consumer backdrop, performance across retail has strengthened since the launch of autumn/winter ranges.”
The retailer flagged uncertain trading conditions. It said: “We remain cautious about the near future as we continue to face a challenging macroeconomic environment, high levels of inflation, and the potential impact of these on consumer spending patterns.
”We also highlight the importance of refinancing our asset-backed lending facility, which expires at the end of January 2023. However, we continue to make good progress across our strategic pillars and we believe these initiatives will help to offset some of that potential risk.
“We have maintained good inventory availability across the group, despite predicted supply chain issues, which has allowed us to launch our AW22 season in line with our expectations. We expect revenues to continue to recover throughout full year 2023, although still not reaching pre-pandemic levels.
“Increasing cost inflation, exacerbated by the conflict in Ukraine, is likely to put pressure on operating margins across each of our territories. The group has taken action to hedge energy costs, with the majority of UK energy fixed until summer 2024 and the remaining European requirement fixed until the end of December 2022, but expects to see inflation across other areas of the cost base.”
In the current year, Superdry anticipates an adjusted profit before tax of between £10m and £20m.
Founder and chief executive Julian Dunkerton said: “These are exceptional times for retail and for the economy more generally and like all brands, we’re having to work harder than ever to drive performance.
“Against that backdrop, I am pleased that we managed to return the business to full-year profit, driven by increased full-price sales, whilst also making strong strategic progress. I’m proud of the strides our team has made in delivering great product while also making a step-change in our social and digital capabilities and real progress towards our sustainability objectives.
“Superdry is a premium, affordable brand, which should mean we are well-positioned as customers think more carefully about their purchases. That said, given the current challenging conditions, we continue to run the business prudently while remaining focused on delivering our strategic goals.”
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