Superdry warns on profit as Dunkerton vows to ‘stabilise’ retailer
Superdry warned investors today that full-year profit is likely to miss expectations, as founder Julian Dunkerton vowed to “stabilise” the situation at the struggling fashion brand.
While global revenue grew 3.6 per cent year-on-year in the retailer’s fourth quarter, it warned that underlying profit before tax is “likely to be below the range of market expectations”.
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That means profit will slip below analyst forecasts of between £54.1m and £59.4m, after the firm issued a separate £23m profit warning last October.
The trading update follows Dunkerton’s dramatic return to the company in April, when he won a shareholder vote with 50.8 per cent of investors’ support, leading to a board exodus as he took control.
“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,” the interim chief executive said today.
“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 e-commerce proposition, which are two important steps towards addressing Superdry's recent weak performance.”
He said he has found “immediate opportunities” to boost efficiency and performance, such as upping the range of products sold online at no discount, adding more stock to flagship stores, cutting “unnecessary” advertising and introducing 500 new products in the next six months.
However, in the meantime investors are set to suffer lower earnings after Superdry predicted back in December that it could hit £70m in full-year profit.
Dunkerton said: “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.”
Kate Heseltine, analyst at Edison Investment Research, said it is “clear that change is underway” just five weeks into Dunkerton’s return.
Fiona Cincotta, senior market analyst at City Index, added: “The silver lining for Julian Dunkerton from these poor sales figures is that they help support the notion that a change at the top was necessary.
“The Superdry co-founder was only named interim chief executive's on 2 April, so previous management can shoulder much of the blame for this latest shambles.
“The big question is whether Dunkerton's spectacular return to Superdry will reap spectacular results. Dunkerton needs to assemble his new board and management team fast and we've yet to see that happen.”
“Today's statement shows the scale of the challenge ahead of us,” said Peter Williams, Dunkerton’s newly appointed chairman.
“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.
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“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.”