N Brown has revealed its sales dropped 2.1% to £165.1m during the first quarter of the year.
In the 13 weeks to 28 May 2022, N Brown experienced a 7.2% drop in sales (£31.1m) among its heritage brands, while its strategic brands, JD Williams, Jacamo and Simply Be, experienced a rise of 2.5% to £75.2m.
Q1 FY23 has seen continued growth in revenue from strategic brands against a comparative period last year that covered the final period of full lockdown in March and early April 2021, which provided a tailwind to online retail demand.
However, the brand stated that the balance sheet “positions it well for the future”, as the group had unsecured net cash of £30.8m by the end of FY23. The securitisation facility was also underdrawn by £66.6m, which can be redrawn if required. In addition, it said its RCF of £100m and overdraft of £12.5m are both fully undrawn.
The company’s earnings expectations for the rest of FY23 reportedly remain unchanged, as outlined in its preliminary results. With adjusted EBITDA still expected to remain at a level similar to that reported in FY21. The group added it remains “mindful” of economic uncertainty and its impact on consumer activity, but these dynamics are reportedly being managed.
The board remains confident that over the medium term its strategy will support the delivery of 7% product revenue growth with a 13% EBITDA margin.
Steve Johnson, chief executive, said: “Sales volumes since the start of the financial year have been softer, reflecting various well-documented pressures on consumer confidence, which are showing no signs of abating in the short term. As these pressures persist, we expect the trading environment to remain challenging and will, therefore, continue to take actions to mitigate the effects wherever possible.
“Despite this uncertain backdrop, our FY23 Adjusted EBITDA expectations remain in line with previous guidance, as we balance cost control and our variable cost base with investments in our technology, our people and in our strategic brands. The Board remains confident in the Group’s strategy and achieving its medium-term objective of delivering sustainable profitable growth.”