TheWorks.co.uk PLC (LSE:WRKS), a value retailer of arts, crafts, toys, books and stationery, has revised down its earnings estimate for the 2024 financial year.
Its share price fell by nearly 30% this morning to 28.30p following the release of its results for the first half of the year.
It now expects adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the full year to be about £6 million, down from prior expectations that it would beat the approximately £9 million of earnings generated in fiscal 2023.
The company reported a 3.4% increase in total sales and a 1.6% increase in like-for-like sales for the first half of the year, but said it faces a challenging macro-economic environment that has affected footfall and demand.
British Retail Consortium (BRC) footfall data for October showed a 5.7% annual decline in customers shopping on the UK high street, compared with a 2.9% yearly decline in September.
TheWorks expects trading conditions to remain difficult in the second half of the year and anticipates that it will have to offer more discounts to compete in the market.
Rosie Fordham, the head of finance, will succeed Steve Alldridge as chief financial officer and join the company’s board on 31 December, it said in the statement.
Gavin Peck, chief executive officer of TheWorks, said that the company has focused on delivering excellent value for its customers, and that its value proposition makes it an ideal choice for families celebrating Christmas affordably.
"Market conditions remain challenging and given the level of uncertainty in trading and forecasting we believe it is now prudent to moderate our expectations for FY24,” said Peck. “Despite this short-term volatility, we believe that our 'better, not just bigger' strategy has the potential to deliver profitable growth in the medium and long-term."