Boss Julian Dunkerton believes that his iconic Superdry (LON:SDRY) brand now has real momentum and he was delighted by how the group’s retail trading had continued to strengthen.
However, in the first half year, covering the 26 weeks to 29th October, the group was let down by the poor performance of its wholesale operations.
The interim results reported a 3.6% increase in group revenue to £287.2m (£277.2m) with the adjusted pre-tax loss coming out at £13.6m (£2.8m loss).
Including the nine weeks to end December the group saw stores revenues rising 14.3% to £117.7m as its customers returned to the high streets, with the group seeing strong demand for its womenswear, denim and jackets.
The wholesale side suffered from the lagged recovery after Covid combined with shipment timing.
The group is known globally for its distinct collections of affordable, premium quality clothing, accessories and footwear. There are 219 physical stores, around 450 franchisees and licensees, with the group selling in over countries across the world.
Boss Julian Dunkerton stated that:
“The Superdry brand has real momentum and I’m delighted by how our retail trading continues to strengthen. We’ve done this against a difficult macroeconomic backdrop by delivering well-designed, affordable, and responsibly sourced products which have resonated well with customers.
Our coats performed really well in the run up to Christmas, and womenswear continues to be a highlight for us. Stores continued to recover strongly and online had its biggest ever week over Black Friday, helped by our new ecommerce platform which is delivering real benefits.
Despite the underlying brand recovery, our profits in the first half fell short of expectations mainly due to the underperformance of Wholesale.
Whilst we did trade well through November and December, the outlook for the remainder of the year is uncertain and as a result, we are moderating our profit outlook to broadly breakeven. We don’t expect market conditions to become easier any time soon, but with a new financing package in place and the brand in great health, we approach the year ahead with optimism.”
Analyst Wayne Brown at Liberum Capital has reiterated his view that Superdry shares are cheap and offer significant long-term value.
For the year to end April 2023 he is estimating £604m (£610m) group revenues, with a £5.8m pre-tax loss (£21.9m profit), but with net debt falling by £20m to £198m.
The coming year sees Brown looking for £645m sales, £8.8m profits and earnings of 8.2p per share.
He has a Buy rating on its shares looking for 500p in due course.