SuperDry (LON:SDRY) on Monday issued a warning about its full-year financial results, citing unusually warm weather and the effect of foreign exchange costs as reasons for its dampened outlook.
The clothing maker expects profit for the 2019 financial year to be hurt by about £10mln, in part as unseasonably hot weather in the UK, continental Europe and on the east coast of the US have cut into demand for its autumn and winter products, particularly sweats and jackets.
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Euan Sutherland, chief executive of SuperDry, said: "SuperDry is a strong brand with significant growth opportunities, backed by robust operational capabilities, but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather. We are well prepared for peak trading, but the second half of the financial year 2019 presents both risks and opportunities.
The FTSE 250 component highlighted the importance of its cold-weather products, noting it usually delivers 70% to 75% of full-year profit during the second half of its financial year.
“In the small number of cooler days in September, Superdry saw strong year-on-year performances, particularly from its cold weather product categories as footfall increased,” the company said.
Superdry also said historic foreign exchange hedging mechanisms it has put in place have not provided the same degree of protection as it had anticipated.
“This will lead to around £8m in additional foreign exchange costs, split evenly over the financial year,” said Superdry.
Superdry also outlined expectations for its first-half sales outturn, including a low-single-digit owned-store revenue decline and mid-single digit global-brand revenue growth.
The company, which is five months into its 18-month product diversification program, said it plans to make “accelerated” investments of roughly £5mlm in the second half of the financial year 2019 to drive global growth. Its efforts will include in brand communication, digitisation and automation.
In July, Superdry said co-founder Julian Dunkerton sold a 6.7% stake in the company.