Shares in Sosandar (AIM:SOS) PLC dropped 5% as the womenswear retailer cut full-year revenue guidance after sales fell in the first half of the year as it focused on profitability alongside the opening of its first three high-street stores.
Revenue of £16.2 million was reported for the half-year to 30 September, down from £22.2 million a year earlier, as the company moved away from price promotions.
On the other side of the coin, gross margin improve to 62.2% from 55.4% and pre-tax losses fall to £0.70 million from £1.30 million.
The company ended the period with a cash pile of £7 million, reflecting the timing of inbound stock and capital expenditure related to the opening of its first three physical stores in the UK, located in Marlow, Chelmsford and Gateshead.
Sosandar (AIM:SOS) said there had been "strong trading" in all three, coupled with a "demonstrable uplift in traffic to the website in the areas where the stores are located".
Co-CEOs and co-founders Ali Hall and Julie Lavington, former fashion journalists, said the openings mark "a key point in the company's development, as we move towards becoming a true multi-channel retailer".
"We have hit the ground running with strong footfall and conversion, and have also seen a demonstrable uplift in traffic to our website in the areas where our stores are located."
They said trading in the second half has started "strongly", with revenue ahead of last year and a continuation of strong gross margins and full-year revenue guidance had been cut to £40.00 million, but the profit outlook maintained.
City analysts had, on average been forecasting revenue of £45.6 million for the year to next March, with pre-tax profits of £1.0 million.