Thursday’s gloomy statement means Quiz has now bagged an unwanted hat-trick of profit warnings over the past six months.
It had previously blamed House of Fraser’s collapse, torrid trading in November and heavy discounting over Christmas for its previous warnings.
Unfortunately, the previous promotions and sales haven’t done the trick, with bosses having to slash prices even further just to get rid of excess stock as the consumer spending backdrop remains “challenging” in the opening few months of 2019.
“Given the significant shortfall in sales experienced in the final quarter of FY 2019 to date, and should this trend continue throughout March 2019, the group anticipates revenues for FY 2019 to now be approximately £129.0mln,” warned Quiz.
“It is also expected that the increased level of discounting will have a material impact on gross margins generated in the final quarter of FY 2019. The board now anticipates that the group's EBITDA will be approximately £4.5mln for FY 2019.”
Business review underway
Back in January, bosses told the market that sales would be around £133.0mln while underlying earnings would come in at £8.2mln.
That was a steep drop on the £138mln of sales and EBITDA of £11.5mln City number crunchers had previously pencilled in.
“This has been a highly disappointing trading period for the group,” said Tarak Ramzan.
“As a result, the board will be reviewing all aspects of the business over the coming months to ensure that we can deliver the group's long-term potential despite the changing consumer backdrop and challenging trading conditions.”
The findings from the review are set to be reported along with Quiz’s full-year results, which are expected to be published in June.
Quiz shares halved to 17.1p on Thursday morning. Over the past six months, the company has lost more than 80% of its market value.