Coats Group PLC (LON:COA) said full-year profit was likely to be ahead of expectations after sales declines eased off in the third quarter, with improving demand for its threads across clothing and footwear.
Like-for-like sales were down 15% over the four months from July 1, compared to a 45% slump in the second quarter.
READ: Coats Group slides as profits fall by two thirds amid pandemic disruption
The company expects to report underlying profit (EBIT) of US$100-110m for the current year, which is materially ahead of house broker Peel Hunt’s forecast of US$80m.
Trading is continuing to improve, the FTSE 250-listed company said, with costs currently running at around 15% lower than last year.
“Our manufacturing footprint is now effectively fully operational and we have seen an encouraging improvement in brand and manufacturer order confidence into the peak trading season of September-November where production is primarily for the spring/summer 2021 season. Heightened industry inventory levels from significant Covid-related market disruption in the first half appear to be clearing this year broadly as we anticipated,” Coats said.
Its Performance Materials arm also reported 10% sales growth in the quarter, as organic sales declined 13% but February acquisition Pharr HP contributed 23% growth.