Superdry unfashionable with investors after trading update

Shares in trendy fashion retailer Superdry fell heavily on Thursday as the company as February's “Beast from the East” snowstorm and lower spring temperatures took their toll on store sales.

The company said final quarter store sales fell 6% year on year to £86.1m. There was better news from online operations where sales were up 18.2% to £39.7m.

Overall group revenue was up 12.4% to £254.2m in the quarter, with full-year group revenue up 16% to £872m.

Superdry said it continued to benefit from a weak pound which helped boost revenues by 60 basis points in the quarter.

It added that full year gross margins were expected to have fallen year-on-year by around 200bps and expected full year pre-tax profits, after the distribution centre migration and development market investment, to be £96.5m - £97.5m.

Full year statutory profit will be affected by a non-cash impairment charge of approximately £7.2m in respect of the brand's last flagship store investment, in Berlin Kranzler, which was made in 2015, Superdry said.

“Store-based revenues remained under pressure. In addition, throughout the fourth quarter revenues were impacted by snow disruption in key markets and lower year-on-year average temperatures at the start of the spring/summer season,” it added.

For the 2019 full year, Superdry said it expected to generate “high single-digit statutory revenue growth, led by double-digit growth in our capital light wholesale and ecommerce channels...while managing ongoing challenging conditions in stores”.

“Our commitment to future operating efficiency and the increased scale of our two key development markets will each contribute to moderate operating margin expansion.”

Chief executive Euan Sutherland said that while the consumer environment “remains challenging” growth opportunities and confidence in the quality of sustainable earnings growth meant the company could “deliver over the long-term".