Superdry swings to profit but ‘cautious’ on near future

Superdry has returned to profitability as pre-tax profits surged to £21.9m in the 53 weeks ended 30 April 2022 (FY22), compared with a loss of £12.6m in FY21.

However, the company said it remains “cautious” about the near future amid a “challenging” macroeconomic environment, high levels of inflation, and the potential impact of these on consumer spending patterns.

Overall, total revenues increased 9.6% year-on-year from £556.1m to £609.6m, largely as a result of lapping enforced store closures and lifting of restrictions in “key” markets.

In FY22, 40% of all garments contained organic, recycled, and low impact fibres which drove 46% of revenue, an increase of 11% year-on-year.

Superdry said it is seeing an encouraging start to FY23, particularly in Autumn/Winter trading, and customers are moving away from online and back to stores, although store footfall hasn’t fully recovered to pre-Covid levels.

Looking ahead, increasing cost inflation, exacerbated by the conflict in Ukraine, is likely to put pressure on operating margins across each of Superdry’s territories.

Superdry added that it highlights the importance of refinancing its Asset Backed Lending facility which expires at the end of January 2023.

The group expects to deliver an adjusted pre-tax profits of between £10m and £20m in FY23.

Julian Dunkerton, Superdry CEO, said: “These are exceptional times for retail and for the economy more generally, and like all brands we’re having to work harder than ever to drive performance. Against that backdrop, I am pleased that we managed to return the business to full-year profit, driven by increased full price sales.

“Superdry is a premium, affordable, brand, which should mean we are well-positioned as customers think more carefully about their purchases. That said, given the current challenging conditions, we continue to run the business prudently while remaining focused on delivering our strategic goals.”