New Look Q3 profit hit by 'extremely challenging' UK market

Fashion retailer New Look posted a 37.6% drop in third-quarter profit on the back of “extremely challenging” conditions in the UK market.

In the 13 weeks to 24 December, pre-tax profit fell to £30.1m from £48.2m in the same quarter a year ago. Underlying operating profit fell 26% to £52.2m, while revenue inched up 0.8% to £422.6m.

Group like-for-like sales were down 4.6% in the quarter, with LFL sales in the UK 4.7% lower than the third quarter of 2016.

In the year to date, group like-for-like sales fell 7%, while UK LFL sales declined 7.3%.

Chief executive officer Anders Kristiansen said: “The UK market has continued to be extremely challenging, with reduced footfall and a highly promotional environment on the high street, resulting in a disappointing like-for-like sales performance. Despite this, total sales for the quarter were level as a result of good performances outside the UK, online and in Menswear, proving that our strategy of diversification is the right one for our business.

“It remains key to our growth to continue to diversify our offer and to invest in our priority international markets. We are therefore particularly delighted to announce that we have surpassed the milestone of 100 stores in China.”

New Look said it expects trading conditions in the UK to remain challenging through the fourth quarter of this year and into full-year 2018.

"We are well hedged for FY18, remain highly cash generative and will continue to focus on improving our business performance and delivering our diversification strategy. We are well positioned and will continue to invest in our key strategic initiatives."