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Made.com has issued a profit warning for FY22 as recent trading has been “volatile” amid worsening consumer confidence, which has in turn impacted demand for big-ticket purchases.
According to the retailer, the dip in consumer confidence has made new customer acquisition at financially attractive rates “challenging”, while gross sales for H1 2022 were -19% against last year.
The group has now updated its guidance, expecting FY22 sales to be down by -15% to -30%, down from a previous guidance of 0% to 15%. Full year EBITDA is expected to be -£50m to -£70m, down from -£15m to -£35m.
The group based this update on non-recurring costs, volatile trading and ongoing expectation for no near-term improvement in discretionary big-ticket demand, nor in new customer acquisition.
Profitability in 2022 is also expected to be adversely impacted thanks to additional promotional and clearance activity and additional costs in the supply chain due to disruptions at ports and extra handling at warehouses.
The group said it was now “actively addressing” all non-strategic fixed costs across the business to help better position it for the future, with areas of focus to include forward stock buying, warehousing and sourcing markets, and reviewing its operational structure and headcount.
Nicola Thompson, CEOof Made.com, said: “It’s clear that things are tough for consumers at the moment. Understandably, we’ve seen a worsening in consumer confidence since May and this has had an impact on this period’s performance. As such it’s prudent for us to take a conservative view of what we can expect in the second half of this year.
“It’s thanks to the hard work and determination of our team at MADE that we’ve made strong strategic progress over this period, despite the challenging macroeconomics. Looking at our performance over recent years, we have managed to grow the business by 57% since 2019, our last undisrupted year, and increased our market share.”
She added: “To enable us to continue executing on our strategy we’re taking steps to address the non-strategic costs in the business, as well as considering options to allow us to strengthen the balance sheet sufficiently to navigate what will undoubtedly continue to be challenging conditions. We’re confident that this will put us in a strong position for the coming years.”
