TIDMSDRY
RNS Number : 5599S
Superdry PLC
07 November 2019
SuperdryPlc
("Superdry" or "the Company")
7 November 2019
Pre-Close Trading Statement
Reset underway with full price stance protecting margin and
brand
Superdry today announces a trading update covering the 26 week
period to 26 October 2019 (the 'half year' or 'period')
Performance Highlights
26 weeks to 26 26 weeks to Change
October 2019 27 October 2018
("H119")
("H120") GBPm
GBPm
Group revenue 367.8 414.6 (11.3)%
--------------- ----------------- --------
Channel revenue (1)
--------------- ----------------- --------
Store 157.3 178.1 (11.7)%
--------------- ----------------- --------
E-commerce 57.9 64.7 (10.5)%
--------------- ----------------- --------
Wholesale 152.6 171.8 (11.2)%
--------------- ----------------- --------
Store gross margin 71.4% 68.2% +3.2%pt
--------------- ----------------- --------
Average retail space
('000's sq. ft.) 1,187 1,186 +0.1%
--------------- ----------------- --------
Summary Highlights
-- Revenue decline of 11.3% reflects an expected year of reset,
and the need to address a number of legacy issues across the
business.
-- Retail sales decline moderated through first half, with Q2
store revenue down 9.4% versus Q1 down 13.9% as key initiatives are
implemented.
-- Focus on full price sales and reducing promotional activity
impacting revenue but driving a +3.2%pt increase in store gross
margin. Full price sales mix (2) averaging 70% H120 versus 52%
H119.
-- Decisive action taken and positive indicators of future
performance underpin full-year expectations.
Performance by channel
In our owned stores we are working through legacy stock whilst
trading against periods of significant promotional activity in the
prior year. A focus on delivering an improved customer experience
and choice, with more fixtures, more stock and more options have
supported the improved Q2 performance. As expected, the full price
stance has resulted in a sales decline, but this has been partially
offset by an improvement to gross margin.
The sales decline in E-commerce has also slowed as we have begun
executing on our growth plan. This includes the injection of new
product to increase choice, making legacy options available online,
delivering greater personalisation, improving the shopping
experience and increasing social media exposure. We are also seeing
the benefit to gross margin from our full price stance, although
this has been offset by lower margin third party growth.
Our Wholesale channel continues to be impacted by the previous
retail strategy of heavy discounting and lower quality product,
along with a change to align deliveries of forward bought product
to the requirements of Wholesale customers rather than our
reporting calendar. The forward order performance for our Spring
Summer 2020 range is more encouraging, as Wholesale customers have
reacted positively to a full price retail position and improved
product design and quality.
Julian Dunkerton, Chief Executive Officer, said:
"We are making good progress with the start to our turnaround
plan for Superdry, returning the business to its design led roots.
We have always said it will take time, but we have a strong team
which is working incredibly hard to deliver this plan. I'm
genuinely excited by new injection product which has started to
land in stores for this peak and even more excited about the new
ranges signed off for next year.
We are moving the business away from a reliance on constant
promotions, and while this focus on full price sales has affected
revenue in the first half, this is being partially offset by a
better gross margin performance. There is good momentum in the
business, and I remain confident of returning Superdry to
sustainable long-term growth."
Outlook
We have taken swift and decisive action to implement strategic
changes as part of the business reset, which is a two to three year
programme to gain full control of the product and costs. We are
confident in delivering further benefits from reset initiatives
across Superdry in the second half. However, we remain cautious
about the challenging market conditions over the peak trading
period.
The Interim statement will be released on 12th December 2019,
including a full review of the first half profit and cash
performance, along with the impact of adopting IFRS16.
Q120 Q119 GBPm YOY Q220 Q219 YOY H120 H119 YOY
GBPm GBPm GBPm GBPm GBPm
Group revenue 148.7 165.5 (10.2%) 219.1 249.1 (12.0%) 367.8 414.6 (11.3%)
Channel Revenue
(1)
Store 76.5 88.9 (13.9%) 80.8 89.2 (9.4%) 157.3 178.1 (11.7%)
E-commerce 24.9 28.4 (12.3%) 33.0 36.3 (9.1%) 57.9 64.7 (10.5%)
Wholesale 47.3 48.2 (1.9%) 105.3 123.6 (14.8%) 152.6 171.8 (11.2%)
Average retail
space ('000's
sq. ft) 1,189 1,184 +0.4% 1,185 1,188 (0.3%) 1,187 1,186 +0.1%
Notes:
(1) As of H219, E-commerce revenue is reported net of online
returns processed in stores whereas previously those online returns
had been reported in store revenues. Consequently, prior year Q1
and Q2 comparatives for E-commerce and stores have been adjusted by
GBP0.4m and GBP0.3m respectively in FY19 to reflect this alignment
of returns to the channel of original purchase.
(2) Full price sales mix relates to the proportion of retail
sales made at RRP in full price stores and owned websites only.
(3) H119 and H120 revenue figures are stated pre any final
IFRS15 Adjustments.
For further information:
Superdry
Nick Gresham nick.gresham@superdry.com +44 (0) 1242 586747
Jefferies
Ed Matthews ematthews1@jefferies.com +44 (0) 2070 298000
Numis
Luke Bordewich l.bordewich@numis.com +44 (0) 2072 601000
Media enquiries
Tim Danaher, Imran Jina superdry@brunswickgroup.com +44 (0) 2074 045959
Conference call
Superdry will be a hosting a conference call for analyst and
institutional investors at 08:30 hours today. A recording of the
conference call will be available on www.corporate.superdry.com
shortly afterwards.
Dial in: +44 (0) 2071 928000
Pin: 4747479
--------------------
Notes to Editors
Superdry is a Global Brand, obsessed with design, quality and
fit and committed to relentless innovation. We design affordable,
premium quality clothing, accessories and footwear which are sold
around the world. We have a unique purpose to help our consumers
feel amazing through wearing our clothes. We have a clear strategy
for delivering continued growth via a disruptive multi-channel
approach combining E-commerce, Wholesale and physical stores. We
operate in 65 countries, including our development markets of North
America and China and have over 4,800 colleagues globally.
Cautionary statement
This announcement contains certain forward-looking statements
with respect to the financial condition and operational results of
Superdry. These statements and forecasts involve risk, uncertainty
and assumptions because they relate to events and depend upon
circumstances that will occur in the future. There are a number of
factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. These forward-looking statements are made only as at
the date of this announcement. Nothing in this announcement should
be construed as a profit forecast. Except as required by law,
Superdry has no obligation to update the forward-looking statements
or to correct any inaccuracies therein.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain. The person responsible for this announcement on
behalf of Superdry is Simon Callander, Group General Counsel and
Company Secretary of Superdry.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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END
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