As the holiday season approaches, Superdry delivers a transparent trading update, highlighting ongoing challenges in its transformative journey.
Despite notable progress in cost-saving initiatives and inventory management, the iconic brand anticipates a impact on full-year profitability due to the persistently demanding trading landscape.
Covering H1 FY24 up to October’s end and the subsequent six weeks until December 10, the update acknowledges hurdles faced in H1 2024. A challenging consumer retail market and an unusually mild autumn impacted the timely reception of Superdry’s AW23 collection, resulting in a 13.1% YoY dip in retail performance. Both stores and e-commerce felt the effects of warmer weather, compounded by a delayed initiation of the end-of-season summer sale. E-commerce additionally faced challenges from a prudent reduction in digital marketing spend, reflecting a focus on profitability.
Wholesale didn’t escape unscathed, registering a 41.1% decline, partly attributed to the strategic exit from the US wholesale operation and influenced by timing differences and channel underperformance.
Amidst challenges, hope emerged as recent seasonal weather patterns in the UK and Europe, coupled with Superdry’s enduring strength in outerwear, bolstered sales. Despite these positive trends, sales in the six weeks post the half-year mark still reflected a 7% decline on a like-for-like basis.
While Superdry maintains its stronghold in outerwear, diversification into other categories remains a hurdle. The company acknowledged that performance fell significantly below expectations, impacting annual profits. A more comprehensive update is slated for January with the release of interim results.
On a positive note, Superdry assures stakeholders that its cost-efficiency program is on track, poised to achieve an initial £35 million in savings within the year. The company continues to explore avenues to trim fixed costs and diligently executes its inventory reduction program. Strategic deals, including an IP joint venture and asset disposals in the South Asian region to partner Reliance Brands, showcase Superdry’s commitment to fortifying its financial position.
Julian Dunkerton, CEO, and founder, commented, «The unseasonal weather in early autumn affected our sales in the first half of the year. While recent colder weather has shown modest signs of improvement, the current trading environment remains challenging. Encouragingly, operational progress in the first half, including the IP sale and advancements in our cost efficiency program, sets the stage for continued resilience.
