Superdry PLC (LON:SDRY) is not just a COVID-19 recovery story but has “very exciting growth prospects”, according to a City broker.
The hoodies seller is expected to return to profit in the current financial year, Liberum said, with potential for growing earnings momentum thereafter.
READ: Superdry posts small sales rise after stores reopen
The product range has improved significantly, and the brand is well on track to return to the heydays of a few years ago, while focus on design is accompanied by the range segmentation, which brings clarity of thought to the offer.
The model should be further de-risked by the 'organic basics' model and the whole collection reflects clearer customer profiling.
The faux-Japanese fashion designer has returned to its full-price offer which analysts said is “key to driving long term brand equity” as it moves “from a retail to a brand philosophy”.
Moreover, since the UK group is smaller than many global brands, it’s easier to ensure sustainability across its supply chain.
The broker added that the management team has been improved, with the addition of chairman Peter Sjolander and chief operating officer Silvana Bonello.
Liberum raised its target price to 600p from 400p reflecting “the sweeping changes… that are reigniting the Superdry brand, returning it to its heritage and driving increasing excitement”.
“The new product collections should have a chance to more fully impact as COVID passes and this is being underpinned by more effective social media and a sustainability and ethical trading focus which now pervades the group. All this is supported by a very healthy balance sheet,” analysts said.
Shares moved 3% higher to 429.5p on Tuesday at noon.