Superdry swings to £42m loss in full-year results

Superdry announced it has swung to a pre-tax loss of £41.8m in the full-year ended 25 April, 2020, with underlying profit before tax down by 210% against the prior year.

In addition, total revenue fell by 19.2% to £704.4m in the period, reflecting a “planned move away” from persistent discounting, as well as the impact of Covid-19 on its fourth quarter, after its entire store estate closed from 22 March until the financial year end.

It comes as the retailer’s board said that it would not propose a final dividend for the full-year. 

In its latest results, the group confirmed that it made an immediate reduction in overheads and discretionary spend following the pandemic, with spending down by £2m per month during lockdown.

In addition, it negotiated short term rent deferrals and accelerated lease renewals across its store estate, achieving on average 43% reductions on the 49 leases agreed to date.

The group said that trading has continued to be disrupted, but has improved from the end of its full-year.

It added that it had adopted a “flexible” trading stance, discounting more in recent months compared to the prior year to help clear excess stock which accumulated during the temporary store closures resulting from Covid-19. 

Since the reopening of its estate, stores in Europe performed “comparatively better” over the year to date, with sales down by 32%, whereas UK sales were down by 55%. 

The weekly sales on reopening in each region were stronger than initially expected, stabilising through July and early August, with the run-rate reportedly improving again in  recent weeks.

 The group was also “encouraged” to see e-commerce perform strongly in the first quarter of its new year, with performance normalising around 4% year-on-year since the start of August.

Looking ahead, however, the group “remains cautious” on the shape of the economic recovery, and is not yet providing formal guidance due to “material uncertainty”. 

Julian Dunkerton, founder and CEO, said: “While our underlying profit has been impacted by trading performance during the year, including Covid-19 related store closures, I am particularly pleased by how strongly Ecommerce has performed, with FY21 first quarter revenues nearly doubling year-on-year. 

“This has been complemented by our increased digital consumer engagement, which helped drive a stronger womenswear mix than we have ever seen before.”

He added: “I’m pleased that we have delivered a good increase in the full price mix, which is up 12pts year-on-year and has had a positive impact on gross margin. 

“We are delivering on the reset of the business, despite the impacts of the pandemic. This has included re-invigorating the store design and layout, preparing for a relaunch of our website, and significantly increasing the number of options available both in store and online.”