Supergroup Surges As Strong Growth Rate Returns
July 13 2011 - 8:34AM
Dow Jones News
Shares in U.K. retailer Supergroup PLC (SGP.LN) surged 25%
Wednesday as renewed sales momentum calmed some of the market
jitters that have beset the premium casualwear group since it
flagged slowing sales growth at the end of the last fiscal
year.
Reporting full year results that had been well-flagged at its
pre-close trading update in June, the company said retail sales in
the first 10 weeks of fiscal 2012 grew 48%, a return to type after
a fourth quarter slowdown to a rate of 39% growth.
Last quarter's slowdown saw the company's shares halve in value
in little over a month amid concerns over the company's mark-down
policy. But Wednesday's trading update allayed some market fears
about the sales trajectory for the group, which has been expanding
quickly both in the U.K. and through wholesale franchises around
the world since it was taken public just over a year ago.
While most of the U.K. high street has been battling with flat
or declining sales of discretionary items, Supergroup's premium
SuperDry brand, worn by celebrities including David Beckham and Zac
Efron, has seen exceptional growth which, combined with
international growth prospects, raised the bar of market
expectations for serial outperformance.
Its strong performance Wednesday was in stark contrast to high
street bellwether Marks & Spencer Group PLC (MKS.LN) which
Wednesday said its modest 3.2% rise in first quarter sales was
hindered by flat sales of clothing and homewares.
At 1151 GMT, Supergroup was the highest riser on the FTSE 250
Index, trading up 218 pence, or 25%, at 1095 pence.
The company said it expects to open 20 new stores in the U.K.
this year, including a flagship store in London's Regent Street. 50
new overseas franchise stores are also earmarked.
Last year the company opened 21 retail and 44 franchise stores,
contributing to a 71% rise in total revenue to GBP237.9 million and
pretax profit of GBP47.3 million, more than double the GBP22.5
million a year earlier.
Net profit fell to GBP31.8 million from GBP72.2 million
predominantly because of a tax credit last year.
By Kathy Gordon, Dow Jones Newswires; 44-207-842-9293;
kathy.gordon@dowjones.com
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