Superdry PLC's (LSE:SDRY) first-half results will have investors keeping an eye out for the outlook after analysts at Liberum recently labelled the fashion brand a “top pick for 2023”.
With the shares down 60% in the year to date, the broker said this was “anomalous” when set against the circa £35mln profit swing the group just announced for the past year and the “tangible turnaround progress” since the return of founder Julian Dunkerton as boss in 2019.
The analysts said they believe it is “very unlikely” that Superdry would go bust in the event of a consumer downturn.
Much of Liberum’s confidence was borne out of the group’s improved balance sheet health and just how well costs and cash were managed during Covid.
Additionally, the City firm noted that the retailer's guidance for the upcoming year is “prudent,” considering the Autumn/Winter product ranges and a management team focused on improving wholesale and benefits from cost-cutting measures.
Looking forward, Superdry announced in its full-year results released in October that it expects to continue to see revenues recover, albeit not reaching pre-pandemic levels just yet.
Superdry also said it expects to see cost inflation continue to eat away at margins across all its territories, although it is hedged on energy costs in the UK until the summer 2024.
As a result, full-year adjusted operating profit before tax is forecast to be between £10mln and £20mln.
Any further update group’s lending facility will also be welcomed by investors.
Last week, Superdry said it was still in negotiations to replace its existing up to £70mln asset-backed lending facility, which ends in January 2023.