N Brown Group PLC (AIM:BWNG), the owner of fashion brands Jacamo, JD Williams and Simply Be, dropped by over 2% on Thursday after overall group revenue slipped by 10% in the three quarters to January.
Overall group revenue for the year-to-date was at £523 million, with sales during the third quarter, which included the festive period, accounting for around £225 million of the total.
The fashion group was forced to hike prices to help offset weaker volumes, which analysts at Shore Capital argue highlights management’s “focus on margins” during a period when consumer confidence and activity are at a low.
Sales in all areas of the company slowed in the 2024 financial year, with the group’s heritage brands, which include sites like Fashion World and Home Essentials, dropping by over 18% year-on-year.
House broker Shore Capital has found positives in the results, pointing to strong trading in third-party branded womenswear, lingerie, beauty, gaming consoles and JD Williams’ Anthology brand.
Full-year profit guidance remained unchanged, but the group warned that revenues would be softer and therefore management would be furthering its margin controls to limit any negative impacts.
Despite the negative sentiment surrounding both the stock and the online fashion industry, Shore Capital experts are hopeful there will be “light at the end of the tunnel”.
“Whilst we believe it will take a more robust trading environment for the full benefits to emerge, with a strong balance sheet in tow, the Group’s equity looks well underpinned at current levels and could offer considerable upside over the medium term with the delivery of its promise,” the broker concluded.
Shares in N Brown are trading at around 18p, down over 41% in the last twelve months.