Superdry trading gets near to normal as colder weather sets in
Superdry may be under pressure at the moment from its unhappy co-founder, and it may have had a tough time in the summer, but its trading update on Thursday painted a picture of a company in reasonably good health.
After its profit warning earlier in October, it seems that global brand revenue excluding China in the 26 weeks to October 27 rose 6.4% to £831.8m, which met its guidance and managed to beat many of its retail peers “against a challenging backdrop”.
Group revenue rose 3.1% to £414.6m but retail store revenue was down 2.3% to £177.4m. Wholesale rose 7.8% to £171.8m and e-commerce was up 6.9% to £65.4m. Its average retail space rose 9.4% so it looks as though like-for-like sales were negative.
One particular challenge was the very hot summer that wreaked havoc at a company known for its cold weather outerwear. But that doesn’t seem to have held it back as much as had been feared for the half as a whole as that 6.4% rise shows. And its e-tail sales were particularly strong. In fact, overall e-tail sales rose 6.9% while its own webstore saw growth of 14%.
Digital also became more important for its wholesale ops during the half and it said its enhanced wholesale B2B digital platform means global wholesale partners can now place both forward and in-season orders online.
And as the company ramps up its international operations, it said that China and the US also performed well in the half. In China, it boosted franchise store numbers and it said that in the US, "our strategy of capital-light growth continues to be successful, with full price US Wholesale revenues growing by 39% in the period.”
Superdry also said that the cooler weather that has now set in means sales have been more “typical“ for the time of year.
“The company's full-year profits are heavily influenced by its performance in the second half, led by cold weather products with jackets and sweats accounting for 55%-60% of autumn winter sales,” it explained.
CEO Euan Sutherland added that the firm has “made significant progress in the first half. We are six months into a product diversification and innovation programme and, as we said in the summer, it will take up to 18 months for the benefits to come through. In the meantime we are well prepared for peak trading and the team remains highly focused on the delivery of sales growth and further efficiencies in the remainder of the year.”
But analysts weren't as upbeat. Emily Salter at Globaldata said: "Although the UK heatwave and House of Fraser [had earlier been] blamed for the retailer’s comparatively poor performance, its growth has been slowing year-on-year signalling a longer term issue beyond these factors.
"The retailer’s prices are at the higher end of the mid-market which may alienate many potential customers, especially as many trend-led clothing retailers now sell athleisure and sports clothing at lower prices, including H&M, ASOS and Topshop. Given the increased competition, Superdry is less able to capitalise on the health and fitness trend and sales are slowing as a result."
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