Fashion brand Quiz has issued a profit warning despite an 8.4% increase in group revenue in the six-week period from 25 November 2018 to 5 January 2019 against the comparable period last year.
This was below anticipated revenues and resulted in a “higher than anticipated” level of discounting to clear inventory. The group previously indicated that its financial results for the year to 31 March 2019 would be largely dependent on trading during the Christmas period. Consequently, the board said it now anticipates that revenues for FY 2019 will be lower than current market expectations at approximately £133m.
It said in its trading update: “Given the continued uncertainty with regards to consumer demand and associated spend, we believe it is prudent to revise our revenue forecasts for the remainder of the year to reflect recent trading patterns.”
Furthermore, group online revenue increased by 34.1% in the period. The brand experienced the strongest growth through its websites where revenue increased by 50.8%.
The group’s UK standalone stores and concessions revenue increased by 1.6% during the period and it opened three new standalone stores and relocated two stores into larger refurbished units in the financial year.
The board predicts the group’s EBITDA (excluding the previously announced write-off of £0.4m debt arising from the administration of House of Fraser) will be in the region of £8.2m for FY 2019.
Tarak Ramzan, chief executive officer, said: “Against the backdrop of challenging trading conditions over recent months, Quiz has delivered further revenue growth over the Christmas period driven by the performance of our own websites. However, the growth and the margin achieved have been below our initial expectations and, consequently, the board considers it appropriate to revise its sales and profit expectations for the current year.
“We remain confident about Quiz’s long-term potential as an omni-channel fashion brand with a clear customer focus. Management’s utmost priority remains achieving further growth for the business and improving profitability in the future.”