Hornby PLC (LSE:HRN), the models and collectables group, reported robust sales growth during its key Christmas quarter, outpacing the broader retail sector despite challenging market conditions.
For the three months to December 31, group sales rose 7% year-on-year, significantly outperforming the British Retail Consortium's figures, which showed a 1.5% decline in UK non-food sales over the same period.
December proved particularly strong, with Hornby achieving a 23% increase in revenue and a 38% rise in gross profit compared to the prior year, buoyed by successful Black Friday promotions and festive trading.
CEO Olly Raeburn said: "In a tough economic climate, we are pleased to be able to report growth in revenue, margins and gross profits through this critical quarter.
Concurrently we are continuing to drive down the inventory levels that had built up in recent years and are delivering our change plans in a steady and sustainable way.
"Our turnaround is very much on track as we further reduce central costs, focus on our core brands and improve operational processes across the business."
The company reported that nearly half of Black Friday transactions came from first-time customers, up from 42% in 2023, underscoring the success of its customer acquisition strategy.
Direct-to-consumer sales climbed 10% during the quarter, contributing to improved margins, which rose to 48%, compared with 44% in the same period a year earlier.
Hornby’s financial position also showed modest improvement, with net debt reduced to £18.2 million by the end of December, down from £18.8 million at the end of September.
Inventory levels were cut by 23% to £16.6 million as the company continued efforts to clear aged stock and focus on newer products.