Footasylum has this morning issued a profit warning that said it expects to report lower than expected revenue and a loss in EBITDA.
Shares in the company dropped by 50% this morning (3 September) following the warning. The footwear retailer blamed “weak consumer sentiment on the high street” for the lowered expectations and added it saw “no sign of a recovery in the short-term on the high street”.
Despite the warning, the company said it still expects to report revenue of £98.6m for the period, an increase of 18.5% on the same period in the last financial year. Store revenue was up 12.4% to £66.3m, online revenue grew 28.5% to £30.2m and wholesale revenue trebled to £2.1m.
Footasylum’s strategy to expand stores alongside new openings is also on track, with six new store openings expected to be completed by December. Barry Bown, CEO at Footasylum, said: “These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Footasylum’s trading has continued to be impacted by weak consumer sentiment.
“On top of that, increased clearance in stores has led to a reduction in gross margin, and we have also had some unforeseen delays in our new store openings and upsizes. However, we have continued our programme of investment, both in upsizing our stores and in our digital capabilities, and are working hard on a number of initiatives to maximise the Company’s performance during the upcoming peak trading period.”
He added: “Despite the challenging outlook, we are encouraged by the continuing progress that we are making in improving our online performance, rolling out our store opening programme, and further enhancing our supplier relationships, and therefore remain confident in the company’s long-term prospects.”