Superdry downgrades FY profit forecast to breakeven

In its interim results, the company said it now expects FY23 adjusted pre-tax profit to be broadly breakeven, down from previous guidance of between £10m and £20m.

Founder and chief executive Julian Dunkerton said: "Despite the underlying brand recovery, our profits in the first half fell short of expectations mainly due to the underperformance of Wholesale.

"We reorganised our team and our approach to support our Wholesale partners and expect to see their confidence return following the retail success of AW22. Whilst we did trade well through November and December, the outlook for the remainder of the year is uncertain and as a result, we are moderating our profit outlook to broadly breakeven."

Dunkerton said Superdry doesn’t expect market conditions to become easier any time soon. However, with a new financing package in place "and the brand in great health, we approach the year ahead with optimism", he said.

In the 26 weeks to 29 October, group revenue rose 3.6% on the same period a year earlier, with retail channels seeing growth of 9.5% as customers returned to bricks and mortar stores, while e-commerce saw a 1.6% increase in sales. However, wholesale revenues fell during the period.

Adjusted pre-tax losses widened to £13.6m in the first half from £2.8m a year earlier.

"Whilst we have seen a recovery in retail, our wholesale business has declined by 5.2% during the period," Superdry said.

"This has been partly driven by the impact of shipment timings, some of which will reverse in the second half."

At 0940 GMT, the shares were down 16% at 124.85p.

Victoria Scholar, head of investment at Interactive Investor, said: "Superdry’s earnings downgrade highlights the pressures facing UK consumers with sky high inflation and the economy teetering on the brink of a recession. Investors have fallen out of favour with the stock which is down by more than 90% over the past five years.

"Despite enjoying a boost to warm winter clothing demand and a record for jacket sales over Black Friday, investors remain cautious. It recently locked in an £80 million refinancing deal with a US hedge fund but at higher interest rates given the monetary tightening environment."