Retailer Swings to Pre-Tax Loss as Pandemic Hits Revenue and Stores
- Superdry reports £41.8m pre-tax loss for full-year ended 25 April 2020
- Underlying profit before tax down by 210% to £704.4m
- Sales down 19.2% due to move away from persistent discounting and Covid-19 impact
- No final dividend proposed for full-year
- Reduced overheads and negotiated rent deferrals during lockdown
- European stores perform better than UK stores in reopening period
- E-commerce sales up 4% year-on-year in first quarter of FY21
- CEO Julian Dunkerton: ‘strong digital consumer engagement’ and increased full price mix
Superdry has reported a pre-tax loss of £41.8m for the full-year ended 25 April, with underlying profit before tax down by 210% compared to the prior year. The retailer’s total revenue fell by 19.2% to £704.4m due to a planned move away from persistent discounting and the impact of Covid-19 on its fourth quarter, as all stores closed from 22 March until the financial year end. The company did not propose a final dividend for the full-year. It reduced overheads and discretionary spend during the pandemic, cutting £2m per month in lockdown. It also negotiated short-term rent deferrals and achieved average 43% reductions on 49 leases agreed so far. Trading has been disrupted but improved since the end of the full-year. The group adopted a flexible trading stance, offering more discounts than in the prior year to clear excess stock from temporary store closures caused by Covid-19. European stores have performed better than UK stores since reopening, with sales down 32%, while UK sales dropped by 55%. E-commerce sales increased by 4% year-on-year in the first quarter of FY21 and normalized since August. CEO Julian Dunkerton expressed optimism about digital consumer engagement and a stronger womenswear mix, contributing to a 12pts increase in full price mix.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Superdry’s financial performance during the pandemic, including details on their losses, revenue decline, and response to the situation. It also includes quotes from the CEO that support the claims made in the article.
Noise Level: 3
Noise Justification: The article provides relevant information about Superdry’s financial performance during the pandemic and its response to the crisis, including changes in revenue, profit, and e-commerce growth. It also includes insights from the CEO on the company’s strategy and future outlook. However, it could benefit from more analysis of long-term trends or possibilities and a deeper exploration of the consequences of decisions on those who bear the risks.
Financial Relevance: Yes
Financial Markets Impacted: Superdry’s financial performance and stock prices
Financial Rating Justification: The article discusses Superdry’s financial results, including a pre-tax loss and reduced revenue due to the impact of Covid-19 on its business operations. It also mentions the company’s efforts to reduce overheads and negotiate rent deferrals, as well as the performance of its e-commerce sales.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.
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