Superdry PLC (LON:SDRY) expressed caution about its prospects in the current financial year as sales slipped back during August and September.
The hoodie designer expects full-year store sales to remain under pressure, wholesale to improve from current levels while e-commerce is set to benefit from the continued channel shift arising from social distancing measures in stores.
READ: Superdry bolsters balance sheet as trading remains subdued
After resorting to heavy discounts to clear out stock, the retailer expects a hit on gross margin but costs will be “substantially” lower thanks to rent renegotiations, savings in logistics, a substantial reduction in bad debt expense and cuts in discretionary spend and payroll.
As part of its turnaround plan, the faux-Japanese clothier looks to “return to a design-led philosophy” and bring the store portfolio to profitability, as well as investing in the digital channels.
Pandemic figures
In the 20 weeks to September 12, group revenue slipped 27% compared to last year, but performance in August and September worsened compared to June and July.
Stores and wholesale revenue dropped by 48% and 35% respectively, while online shot up 55%.
Europe only saw a 32% dip in the period while sales in the UK and the US fell 55% and 75% respectively because they reopened later and still have a small number of stores closed.
In the year to April 25, revenue slipped 19% to £704mln while the statutory loss before tax widened 87% to £166mln. The board did not propose a dividend.
Still a 'buy' for Liberum
"The current market cap of £125m is now smaller than the value of the inventory (c.£158m) on the balance sheet," analysts at Liberum commented, adding the results were as good as could be expected considering the COVID-19 impact.
"This has to be wrong considering momentum and the proven track record of this management to convert this into cash."
Shares lost 11% to 135p on Monday morning.
--Adds analyst comment--