(Alliance News) - Superdry PLC on Thursday said it swung to profit in its first half, despite a drop in revenue.
The Cheltenham, England-based clothing retailer reported pretax profit of GBP4.0 million in its first half ended October 23, swinging from a loss of GBP18.9 million a year earlier.
Superdry posted an adjusted pretax loss of GBP2.8 million in financial 2022, narrowing from the previous year's loss of GBP10.6 million.
The company reported an adjusting item of GBP6.8 million, mostly composed of fair value movement on foreign exchange forward contracts.
Revenue fell by 1.9% year-on-year to GBP277.2 million from GBP282.7 million, and down by a quarter on a two-year comparative of GBP369.1 million, pre-Covid.
However, the drop in revenue was offset by an improvement in margins, which were lifted to 55.2% from 51.7% the previous year, owing to the company's move to a greater proportion of full-price sales.
In the 11 weeks from October 24 to January 8, Superdry said revenue has grown by 20% over the previous year's average, despite reduced footfall, Omicron restrictions, and reduced mark-down offers during Black Friday and post-Christmas sales. It opened its Oxford Street flaghship store in November, which has outperformed expectations. Revenue for the period is still down 12% on the full-year 2020 average, however.
Superdrug said it expects to achieve previous estimates for adjusted pretax profit for the full year. It plans to offset inflationary cost pressures with further increases in gross margin by reducing mark-down mix and price realignments.
The retailer's share were down 6.0% to 234.00 pence each in London on Thursday afternoon.
Chief Executive Officer Julian Dunkerton commented: "I'm really pleased with our progress against each of our strategic initiatives with clear signs of brand and financial recovery. The health of the brand is best demonstrated by the improving sales run-rate and a +12%pts2 increase in Retail full-price sales mix which helped drive Group gross margin up +3.5%pts year-on-year...While there remains uncertainty about the impact of Covid-19 and the macro-economic environment, I am increasingly confident in the accelerating momentum of our reset and the strengthening of the brand."
By Elizabeth Winter; elizabethwinter@alliancenews.com
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