TIDMSDRY
RNS Number : 5824N
Superdry PLC
10 May 2018
SuperdryPlc
Pre-Close Trading Statement
10 May 2018
Superdry multi-channel strategy delivers strong revenue and
earnings growth
Superdry Plc ('Superdry'), the Global Digital Brand, today
announces a trading update covering the 16 week period from 7
January 2018, and the 26 week (the 'half year') and 52 week (the
'full year') periods ended 28 April 2018.
Performance Highlights
-- Global Brand Revenue(1) increased by 22.1% to GBP1.6bn
in FY18, driven by continued strong statutory revenue(2)
growth in key strategic channels of Wholesale (+29.6%
year-on-year) and Ecommerce (+25.8% year-on-year);
-- Expectation that underlying(3) full year profit before
taxation will be in the range of GBP96.5m to GBP97.5m,
representing a further year of double-digit profit
growth;
-- The reach of Superdry as a Global Digital Brand increased,
with entry into eight new markets in the year through
our Wholesale channel and the launch of additional
country-specific websites for the USA and Switzerland;
and
-- Significant strengthening of our Ecommerce proposition
with successful implementation of an industry-leading
Order Management System and extension of multi-channel
capability to European and US distribution centres.
Revenue(1,2)
GBPM Quarter 4 Half Year Full Year
---------------------- ----------------------- ----------------------- ---------------------------
FY18 FY17 Growth FY18 FY17 Growth FY18 FY17 Growth
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Global Brand Revenue 533.5 432.7 23.3% 847.9 709.6 19.5% 1,604.2 1,313.7 22.1%
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Group Revenue 254.4 226.4 12.4% 470.0 418.0 12.4% 872.0 752.0 16.0%
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Channel Revenue(4)
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Wholesale 128.6 101.2 27.1% 164.1 130.7 25.6% 323.4 249.5 29.6%
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Ecommerce 39.7 33.6 18.2% 101.9 83.2 22.5% 163.1 129.7 25.8%
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Store 86.1 91.6 -6.0% 204.0 204.1 0.0% 385.5 372.8 3.4%
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Average Retail
Space (000's sq.
ft.) 1,175 1,035 13.5% 1,173 1,028 14.1% 1,128 983 14.8%
---------------------- ------ ------ ------- ------ ------ ------- -------- -------- -------
Superdry Global Brand Revenue increased by 22.1% to GBP1.604bn
in FY18, with growth achieved in all key territories.
Group revenue growth of 16.0% was driven by the continued strong
progress in Superdry's capital light channels, Wholesale and
Ecommerce, which delivered sales growth of 29.6% and 25.8%
respectively. Superdry continues to benefit from the relative
weakness of sterling, and this foreign exchange impact was
approximately 60bps in the fourth quarter of the year. Store-based
revenues remained under pressure. In addition, throughout the
fourth quarter revenues were impacted by snow disruption in key
markets and lower year-on-year average temperatures at the start of
the Spring/Summer season.
The performance in the full year reflects Superdry's continued
focus on its four strategic pillars:
Global Digital Brand
We continue to strengthen awareness and perception of Superdry
through our integrated digital marketing activity, collaborations
and sponsorship matched to the interests and passions of our
consumers. Our SuperdrySounds summer music festivals campaign
re-enforces the brand's global positioning and creates a strong
bond between Superdry, emerging music talent and our consumers'
interest in music.
As the first part of its commitment as Official Clothing
Supplier to the UK delegation for the 2018 Invictus Games in
Sydney, Superdry provided branded t-shirts for each competitor at
the selection trials for the UK team in April. The event was a
great success, generating significant media interest.
World Market Opportunity
Disciplined expansion through all of the brand's eight channels
to market continues. Developments during the year included new
localised Ecommerce sites introduced in the US and Switzerland, a
24% increase in the number of Superdry franchise locations, with 75
franchise stores opened across 33 countries in the year and
Wholesale relationships in eight new markets.
The brand's development in China remains in line with plan and
underlying performance in the USA continues to be encouraging. As
highlighted previously, performance in the US store base continued
to be impacted by both landlord construction disruption affecting
four existing stores and lower-than-anticipated tenancy levels in
two key new locations. The disruption in these six stores plus the
accelerated investment in bringing our US wholesale operation
in-house has led the US business to make a loss of approximately
GBP3m rather than our previous guidance for a small profit in the
full year.
Relentless Innovation
Our focus on relentless product innovation, delivering the
brand's core DNA of quality, design detail and strong value for
money, continued. The introduction of a range of responsibly
sourced down jackets, which meet the highest ethical standards,
from a price point below GBP100 was particularly successful. We
also delivered strong growth in our iconic Vintage Entry graphic
t-shirt, supported by the resurgence of the trend for original
brand graphics, while ongoing brand extension in Snow and Sport
introduced Superdry to new markets and consumers. Superdry opened
eight standalone Superdry Sports franchise stores in key cities
around the world that are performing well.
Operational Excellence
We continue to develop our core infrastructure and processes,
with further strong progress made in known key value drivers such
as range harmonisation across the Retail and Wholesale channels.
Infrastructure developments during the year included the successful
implementation of an industry-leading Order Management System for
Ecommerce and the extension of multi-channel capability to both our
European and US distribution centres. The developments necessary to
fully integrate our existing Wholesale and Retail inventory pools
remain on track for implementation in Autumn 2018.
Financial Guidance
Current Financial Year
Primarily reflecting the impact of two aspects of previous
guidance, full year gross margins are anticipated to have declined
year-on-year by approximately 200bps. These key drivers are the
dilutive impact of the strong growth within our capital light
Wholesale channel, together with the investments made through
planned clearance activities to reduce the overall carrying level
of inventory.
The Board anticipates that underlying(3) full year profit before
taxation, after the distribution centre migration and development
market investment, will be in the range of GBP96.5m to GBP97.5m
representing another year of double-digit profit growth.
Full year statutory profit will be affected by a non-cash
impairment charge of approximately GBP7.2m in respect of the
brand's last flagship store investment, in Berlin Kranzler, which
was made in 2015.
Forward Guidance
During FY19 we expect to generate high single-digit statutory
revenue growth, led by double-digit growth in our capital light
Wholesale and Ecommerce channels, as per our stated ambition, while
managing ongoing challenging conditions in stores. Our commitment
to future operating efficiency and the increased scale of our two
key development markets will each contribute to moderate operating
margin expansion.
Euan Sutherland, Chief Executive Officer, said:
"Superdry has delivered another good year of brand revenue and
profit growth as we have sharpened our focus on our successful
Global Digital Brand strategy. We benefit from a clear brand
positioning, an agile infrastructure that serves our global
consumers through a truly multi-channel proposition and increasing
operational excellence. Our multi-channel proposition means
consumers can choose how they want to engage with the brand,
allowing them to switch easily between our stores and our digital
channels.
While the consumer environment remains challenging, we are
confident that Superdry's reputation for quality, design detail and
strong value for money, underpinned by our continued investment in
the business, leaves us well placed. We remain focused on the
growth opportunities ahead and confident in the quality of
sustainable earnings growth we can deliver over the long-term."
For further information:
Superdry
Nick Wharton +44 (0) 1242 586456
Chief Financial Officer nick.wharton@superdry.com
Adam Smith +44 (0) 1242 586616
Head of Investor Relations adamj.smith@superdry.com
Tulchan
Susanna Voyle +44 (0) 20 7353 4200
superdry@tulchan.com
Announcement of FY18 Preliminary Results
Superdry is scheduled to announce its Preliminary Results for
the 52 weeks ended 28 April 2018 on Thursday 5 July 2018.
Conference call
Superdry will be hosting a conference call for analysts and
institutional investors at 08:30 hours today. A recording of the
conference call will be available on corporate.superdry.com.
Dial
in: UK Toll Number: +44 3333 000 804
UK Toll-Free Number: 0800 358 9473
Pin: 41797041#
Supporting Notes
1. Global Brand Revenue represents the equivalent value
of the Group revenue at the prices paid by consumers.
It is calculated by uplifting all revenues by applicable
sales tax rates and uplifting revenues within our
Wholesale channel by a factor representing the applicable
mark up from wholesale to consumer prices.
2. Foreign currency sales are translated at the average
rate for the month in which they were made.
3. Underlying is defined as reported results before exceptional
and other items. The Directors believe that the presentation
of the results in this way is an alternative analysis
of Superdry's financial performance, as exceptional
and other items are identified by virtue of their
size, nature or incidence. This presentation is consistent
with the way that financial performance is measured
by management and reported to the Board and the Executive
Committee and assists in providing a relevant analysis
of the trading results.
4. Management have identified an offsetting allocation
adjustment between the Ecommerce and Store channels
that impacts the previously disclosed revenue performance
for Q3 FY18 for these two channels only. The corrected
channel growth for Q3 would be Ecommerce +25.4% and
Store +4.8% compared to the previously disclosed values
of +30.5% and +3.1% respectively.
5. Retail Space Analysis
Closing FY18 H1 FY18 H2
FY17
---------------- ---------------- ---------------- ----------------
Sq.Ft. Stores Sq.Ft. Stores Sq.Ft. Stores
---------------- ------- ------- ------- ------- ------- -------
Owned Stores
---------------- ------- ------- ------- ------- ------- -------
UK & ROI 573 99 580 102 581 102
---------------- ------- ------- ------- ------- ------- -------
EU 405 101 441 108 470 114
---------------- ------- ------- ------- ------- ------- -------
North America 76 20 101 23 128 30
---------------- ------- ------- ------- ------- ------- -------
Group 1,054 220 1,122 233 1,179 246
---------------- ------- ------- ------- ------- ------- -------
Franchised
Stores 319 355 394
---------------- ------- ------- ------- ------- ------- -------
License Stores 16 17 18
---------------- ------- ------- ------- ------- ------- -------
Branded Stores 555 605 658
---------------- ------- ------- ------- ------- ------- -------
Notes to Editors
Superdry is a Global Digital Brand, obsessed with design,
quality and fit and committed to relentless innovation. We design
affordable, premium quality clothing, accessories and footwear
which are sold around the world. We have a unique purpose to help
our customers feel amazing through wearing our clothes. We have a
clear strategy for delivering continued growth via a disruptive
multi-channel approach combining Ecommerce, Wholesale and physical
stores. We operate in 54 countries, including our development
markets of North America and China and have almost 5,000 colleagues
globally.
Cautionary Statement
This announcement contains certain forward-looking statements
with respect to the financial condition and operational results of
Superdry Plc. These statements and forecasts involve risk,
uncertainty and assumptions because they relate to events and
depend upon circumstances that will occur in the future. There are
a number of factors that could cause actual results or developments
to differ materially from those expressed or implied by these
forward-looking statements. These forward-looking statements are
made only as at the date of this announcement. Nothing in this
announcement should be construed as a profit forecast. Except as
required by law, Superdry Plc has no obligation to update the
forward-looking statements or to correct any inaccuracies
therein.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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