Superdry in profit warning after heatwave hits sales

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Superdry shares have sunk by almost 30% after warning that profits will take a £10m hit because the recent heatwave hurt sales of winter clothes.

“Unseasonably hot weather conditions in the UK, Continental Europe and on the East Coast of the USA,” were to blame, the fashion retailer said.

The problem has continued into October, with sales of jumpers and jackets particularly badly hit, Superdry said.

The company also said it faced £8m in additional foreign exchange costs.

“Superdry is a strong brand with significant growth opportunities… but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,” said chief executive Euan Sutherland.

In August, the British Retail Consortium warned that if the warm weather continued into October it could cost non-food retailers more than £300m of autumn and winter sales.

Superdry makes about 70-75% of profits in the second half of the year. The company is, however, five months into an 18-month plan to diversify its range to reduce reliance on winter sales.

‘Waning credibility’

The group also pointed to the turbulent retail environment, noting “well-publicised challenges” faced by some of its trading partners.

Superdry clothes are sold in House of Fraser, which was bought out of administration earlier this year by Sports Direct but is still closing some stores.

Other suppliers to House of Fraser, such as Ted Baker and Mulberry, have already flagged the negative impact on profits which resulted from the administration.

Retail analyst Nick Bubb said that, given some other retailers have warned about the warm autumn weather, the Superdry statement could have been expected. But he described the £8m hit due to exchange rate factors as “mysterious”, and said details about future profit and sales guidance were sketchy.

Despite the company saying Superdry had good growth prospects, Mr Bubb warned that “management credibility is on the wane”.

Superdry will issue its scheduled first-half results announcement on 8 November.

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