Shares of SuperGroup Plc (SGP.L) climbed around 16 percent in the morning trade on London Stock Exchange after the clothing retailer reported higher profit and revenues for its fiscal 2012 and said its early trading for fiscal 2013 has been broadly in line with expectations. Underlying profit, however, declined from last year and almost in line with its latest outlook. The company, which had issued three profit warnings in the past year, avoided a profit warning this time.
Chief Executive Officer Julian Dunkerton said, "Whilst sales have continued to grow substantially, this has been a disappointing year for the Group. We have faced challenges brought about by the rapid growth of our business which have been compounded by the volatile and adverse market conditions being experienced by all fashion retailers. Profits have, therefore, fallen short of expectations."
In April, Superdry brand owner's shares had plunged 39 percent as it lowered its full-year profit outlook, citing certain "arithmetic errors", timing of pull-down of stock in its Wholesale business and lower margins in Retail sales. In February as well as in October last year, the company had issued profit warnings.
In its fiscal year 2012, SuperGroup reported an 8.7 percent rise in pre-tax profit to 51.4 million pounds, while underlying pre-tax profit, which excluded certain items, dropped 14.7 percent to 42.8 million pounds. Earlier profit projections in April was for pre-tax profit of 43 million pounds.
The company reported a 31.9 percent growth in revenue to 313.8 million pounds despite operational challenges. UK like-for-like sales, including internet, grew 2 percent on the year. Gross profit margin climbed 120 basis points to 57 percent from last year's 55.8 percent.
"We have now strengthened our management team and I am pleased with the impact these changes are having on our efforts to improve our operational capability. Despite the backdrop, the Superdry brand remains strong and I am encouraged by the potential for our 2013 ranges," Dunkerton added.
Looking ahead, the company said it is optimistic that recently undertaken changes will ensure delivering financial performance in line with the expectations of investors.
Regarding the current trading, the company noted that the first 10 weeks of fiscal 2013 trading have been affected by the unseasonal weather conditions, with June being announced recently as officially the wettest on record. Despite that, results have been broadly in line with management expectations.
SuperGroup shares are currently trading at 389.50 pence, up 55 pence or 16.44 percent in London.
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by RTT Staff Writer
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