REG - Superdry PLC - Pre-Close Trading Statement

SuperdryAnnouncement

09/05/2019 07:05

RNS Number : 4418Y
Superdry PLC
09 May 2019
 


SuperdryPlc
("Superdry" or "the Company")
 
9 May 2019
Pre-Close Trading Statement
 
Trading performance continues to be weak; initiatives to stabilise and improve performance underway
 
Superdry announces a trading update for the 13-week period from 27 January 2019 to 27 April 2019 ('Quarter 4').
 
Performance Highlights
 
-     Global Brand revenue up 3.6% over full year
-   Poor Wholesale and Ecommerce performance in Quarter 4, actions to address this underperformance underway
-     Improved own store performance in Quarter 4
-     Full year underlying profit before tax likely to be below the range of market expectations
-     Following management changes on 2 April, initial actions to stabilise performance and improve the long-term prospects of the Company already being implemented
 
Revenue1,2




£m


Quarter 4


Second half


Full Year




 


FY19


FY18


Growth


FY19


FY18


Growth


FY19


FY18


Growth




Global Brand Revenue


406.3


428.6


(5.2)%


885.9


883.5


0.3%


1,736.1


1,675.2


3.6%




 


 


 


 


 


 


 


 


 


 




Group Revenue


187.8


196.7


(4.5)%


457.1


470.0


(2.7)%


871.7


872.0


(0.0)%




 


 


 


 


 


 


 


 


 


 




Channel Revenue


 


 


 


 


 


 


 


 


 




Wholesale


89.7


98.9


(9.3)%


163.2


164.1


(0.5)%


335.0


323.4


3.6%




Ecommerce


29.3


30.5


(3.9)%


98.3


100.0


(1.7)%


163.7


161.2


1.6%




Store


68.8


67.3


2.2%


195.6


205.9


(5.0)%


373.0


387.4


(3.7)%




 


 


 


 


 


 


 


 


 


 




Average Retail Space (000's sq. ft.)


1,200


1,175


2.1%


1,200


1,173


2.3%


1,193


1,128


5.8%




 
·      Global Brand revenue1 of £1,736.1m increased by 3.6% year-on-year.
·      Group revenue flat year-on-year (0.0%), but declined 4.5% in Quarter 4.  Specifically:
o  Wholesale revenue up 3.6% to £335.0m year-on-year, though declining 9.3% in Quarter 4.  The Quarter 4 decline was driven by increased levels of returns, lower than anticipated in-season orders and decisions not to ship to customers that had reached their credit limits.
o  Ecommerce revenue up 1.6% year-on-year to £163.7m but Quarter 4 revenue down 3.9%.  Performance was impacted by the reduction of year-on-year discounting, including the removal of planned promotional activity at the end of Quarter 4.
o  Store performance improved in Quarter 4, growing 2.2% but down 3.7% to £373.0m year-on-year.
·      Comprehensive programme to deliver £50m+ gross cost savings by FY22 continuing.
·      Primarily as a result of the weak Wholesale and Ecommerce performance, along with other measures to deliver the new operational strategy, we now expect FY19 underlying profit before tax to be lower than the current range3 of market expectations.  A further detailed update will be provided at the full year results announcement on 4 July 2019.
·      As a result of the store portfolio review announced by the Company on 12 December 2018, the Company will make a non-cash onerous lease and store impairment provision.  Given the management transition and the consequent need to update the Company's longer term strategic plans, the review has not yet been finalised but will have an impact that benefits both FY19 and subsequent years.  Further details will be provided at the full year results announcement on 4 July 2019.  
·      In the five weeks since the change of management on 2 April, Interim Chief Executive Officer Julian Dunkerton has already identified immediate opportunities to improve the efficiency and performance of the business, and taken action to implement these opportunities. Immediate actions have included:
o  Increasing the number of options sold online with those additional options generating full price sales.
o  Repopulating selected flagship stores with a greater density of stock.
o  Reducing unnecessary promotional activity resulting in enhanced margins and strengthening the brand.
o  500 new products to be introduced in the first 6 months.
 
A further update on strategic progress will be provided at the full year results announcement on 4 July 2019.
 
 
Julian Dunkerton, Interim Chief Executive Officer, said:
"I am very excited about being back in the business. There's a lot to do, but after five weeks, I am more confident than ever that we can restore Superdry to being the design led business with strong brand identity I know it can be. My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the Ecommerce proposition, which are two important steps towards addressing Superdry's recent weak performance. The impact of the changes we are making will take time to come through in the numbers but I'm confident we are heading in the right direction."
 
Peter Williams, Chairman, said:
"I'm delighted to have joined Superdry. This is a fantastic British brand, and I firmly believe that with the plans Julian is putting in place it will be a great success story once again. Today's statement shows the scale of the challenge ahead of us.  The Company's financial performance won't be turned around overnight, but we know what we need to do, and we are wasting no time in addressing the challenges which the business faces. This includes ensuring the correct corporate governance structure and Board is in place to guide the business going forward. I believe that we are doing the right things to get the business back on top form and delivering long-term sustainable growth for shareholders."
 
For further information:
 
Superdry
Adam Smith                               adamj.smith@superdry.com                   +44 (0) 1242 586747
 
Jefferies
Ed Matthews                             ematthews1@jefferies.com                     +44 (0) 20 7029 8000
James Thomlinson                    jthomlinson@jefferies.com                      +44 (0) 20 7029 8000
 
Media enquiries
Tim Danaher, Imran Jina           superdry@brunswickgroup.com               +44 (0) 207 404 5959
 
Reporting calendar confirmation
 




Full year results announcement


4 July 2019




 
Conference call
Superdry will be a hosting a conference call for analyst and institutional investors at 08:30 hours today. A recording of the conference call will be available on www.corporate.superdry.com shortly afterwards.
 




Dial in:


0800 376 7922




Pin:


1593729




 
Supporting notes:
 
1.   Global Brand revenue represents the equivalent value of the Group revenue at the prices paid by customers. It is calculated by uplifting all revenues by applicable sales tax rates and uplifting revenues within our Wholesale channel by a factor representing the applicable mark up from wholesale to consumer prices. Global Brand revenue stated including China and sales from licenced territories and product categories. 

 
2.   Foreign currency sales are translated at the average rate for the month in which they were made.
 
As of H2 19, Ecommerce revenue is reported net of online returns processed in stores whereas previously those online returns had been reported in store revenues. Consequently, prior year Q3 and Q4 comparatives for Ecommerce and stores have been adjusted by £1.5m and £0.4m respectively in FY18 to reflect this alignment of returns to the channel of original purchase.
 
Quarter 4 18 figures stated for the comparable 13-week period (previously reported for the 16 weeks to 7 January 2018).  All FY18 and FY19 figures are presented pre-IFRS15 adjustment.
 
3.   The Board considers market expectations for the financial year ending 27 April 2019 are best defined by taking the range of forecasts published by analysts who consistently follow the Company.  The range of underlying profit before tax forecasts as at 7 May 2019, of which the Board is aware, is £54.1m to £59.4m.
 
4.   Retail space analysis:
 




Closing figures


FY18


FY19 H1


FY19 H2




 


Sq.Ft.


Stores


Sq.Ft.


Stores


Sq.Ft.


Stores




Owned Stores


 


 


 


 


 


 




UK & ROI


581


102


591


104


595


105




EU


470


114


477


114


476


113




North America


128


30


130


31


126


30




Group


1,179


246


1,198


249


1,197


248




 


 


 


 


 


 


 




Franchised Stores


 


394


 


427


 


464




License Stores


 


18


 


19


 


22




 


 


 


 


 


 


 




Branded Stores


 


658


 


695


 


734




 
 
Notes to Editors
The Superdry brand is obsessed with design, quality and fit and committed to relentless innovation. We design affordable, premium quality clothing, accessories and footwear which are sold around the world. We have a unique purpose to help our consumers feel amazing through wearing our clothes. We have a clear strategy for delivering continued growth via a disruptive multi-channel approach combining Ecommerce, Wholesale and physical stores. We operate in 63 countries, including our development markets of North America and China, and have almost 5,000 colleagues globally.
 
Cautionary statement 
This announcement contains certain forward-looking statements with respect to the financial condition and operational results of Superdry Plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, Superdry Plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.
 
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for this announcement on behalf of Superdry is Simon Callander, Group General Counsel and Company Secretary of Superdry.
 
 
 
 




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