N Brown backs FY guidance as first-quarter revenue drops

Womenswear retailer N Brown backed its full-year guidance on Thursday as it posted a drop in first-quarter revenue amid "challenging" markets.

In the 13 weeks to 1 June, total revenue declined 3.8%, with product revenue down 5.4%. However, digital revenue pushed up 3% and revenue from financial services grew 8% during the quarter.

The company, which closed its last remaining stores last year, said digital revenue now accounts for 83% of total revenue.

Sales at JD Williams were up 5.9%, while Simply be and Ambrose Wilson saw sales rise 4.6% and 10.1%, respectively.

Chief executive officer Steve Johnson said: "We're pleased to report a solid trading performance in the first quarter. In line with our strategy, we delivered digital revenue growth across JD Williams, Simply Be, Ambrose Wilson and Jacamo as we continue to improve our customer offer whilst managing the decline of our legacy offline business.

"The retail market remains challenging, but we have a clear strategy to deliver profitable digital growth and our full year expectations are unchanged."

N Brown reiterated its 2020 guidance. It expects group operating costs to decline by 2.5% to 4.5%, while net debt is expected to come in between £440m and £460m, although half-year net debt is set to be between £475m and £500m, given continued customer redress and tax settlement payments.

Shore Capital said: "Brown’s Q1 trading update contains no surprises in our view and represents a solid start to the year."

Analysts Darren Shirley and Clive Black said the 5.4% drop in product sales is broadly as expected and reflective of a strategic focus on profitable sales, with the acceleration of the customer migration to online is evident in digital product growth of 3%.

At 0915 BST, the shares were up 2.2% at 134.10p.