Superdry has issued a profit warning, saying an unseasonably warm European and US east coast summer together with foreign exchange costs will reduce income by about £10 million. “Superdry is a strong brand with significant growth opportunities, backed by robust operational capabilities, but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,” said CEO Euan Sutherland in a statement.
“We are well prepared for peak trading, but the second half of financial year 2019 presents both risks and opportunities.”
The company’s share price fell a heavy 20 per cent in early trading after the announcement was made.
Foreign exchange costs are expected to be about £8 million higher this year and the collapse of department store chain House of Fraser has left the fashion retailer an estimated £236,000 out of pocket.
Sofie Willmott, senior retail analyst at GlobalData, said rival chains Quiz, Coast and Ted Baker have all been hit by the downfall of House of Fraser. “Superdry, the usually untouchable brand that consistently delivers double-digit sales growth, is the next to be affected.”
Willmott said Superdry has had an unhealthy reliance on autumn/ winter stock and was unable to trade in season.
“Given that the only certainty with weather is that it can be unpredictable, Superdry should have been better prepared to react to the prolonged warm summer, cutting back on volumes of jackets and coats to avoid overstocks and the need for markdowns.”
Superdry knows this is an issue and is five months into an 18-month product-diversification program to broaden its range.