N Brown Group PLC (AIM:BWNG) saw its shares drop on Thursday after it reported a 7.6% fall in group revenues in the third quarter to £249.2mln and forecast a soft market for UK discretionary consumer goods in 2023, particularly in the first half of the year.
“This, together with the difficult trading environment in FY23, means we will commence FY24 with lower active customers year-on-year,” the catalogue retailer cautioned.
The weaker quarter three trading performance was in line with its expectations but the company warned that it expected quarter four to be softer than quarter three although it pointed out these are typically its quietest months of the year.
The cautious comments pushed N Brown shares 6% lower in early exchanges although the company said that overall, and despite this backdrop, that it expected fiscal year 2023 adjusted EBITDA to be in line with market consensus which it put at £57.5mln.
The company added that it would continue to carefully monitor consumer credit conditions and manage both costs and margins tightly.
Product revenues fell by 9.2% to £166.4mln in the third quarter compared to a year earlier, with financial services revenues down 4.2% to 82.8mln.
House broker Shore Capital held its forecasts for fiscal year 2023 but noted the cautious outlook for 2024.
“We now expect product sales and financial services income to further contract leading us to downgrade our CPTP forecast to breakeven” the broker's analysts said.