Quiz cautious on outlook, shares slide

Quiz shares slid on Monday after the fashion retailer struck a cautious note on the outlook, warning that inflationary pressures were denting consumer demand.

In an update for the year to the end of March 2023, the company said it expects to report a 17% jump in revenues to £91.7m.

Revenues from UK stores and concessions are expected to have risen 23% to £45.5m, with online revenues up 12% to £29.8m and international revenues 10% higher at £16.4m.

Quiz said that in the early months of the year, revenue growth benefited from a strong recovery in consumer demand for its products following the end of Covid restrictions.

However, growth subsequently moderated as inflationary pressures began to impact consumer confidence. As a result of this and reflecting the strong prior year comparatives, like-for-like revenues in February and March 2023 were lower than the previous year.

"However, despite the challenging trading conditions in recent months, group revenues in the final three months of FY23 were broadly consistent with those generated in the comparable period in FY2019, that being the last period unaffected by coronavirus related factors," it said.

Gross margins for the year were in line with management expectations and consistent with those recorded in the previous year. As a result, Quiz still expects to report increased profitability in FY23, with a pre-tax profit of no less than £2m, versus £0.8m a year earlier. This is in line with market expectations.

"However, the widely reported and significant pressures on consumer spending seen in recent months are expected to continue into the new financial year," it said. "The board believes these external headwinds may impact consumer demand across the group's sector over the coming months, reducing its visibility for FY24."

At 0815 BST, the shares were down 19% at 12.51p.