Laura Ashley’s shares took a battering after the retailer issued its second profit warning in six months, attributing it to “demanding” trading conditions.
The fashion and homewares retailer’s shares tumbled by more than 18 per cent — or 2p to 9pm — as it warned its net pre-tax profit for the full year would be “materially” below market expectations.
The company revealed that its full-year earnings would take a £2.8 million hit on the back of a revaluation of one of its freehold properties, compounding the existing challenging market conditions. The retailer did not disclose the location of the revaluated property.
In addition, 22 out of its 25 concessions will close down by the end of the year due to the Bunnings acquisition of Homebase, although the company said it was taking steps to “minimise the impact to profit” on the back of those closures.
“Trading conditions have continued to be demanding,” Laura Ashley said in a market announcement.
“The board of the company therefore expect net pre-tax profits for the year ended 30 June 2017 will now be materially below market expectations.”
In February, Laura Ashley warned its net pre-tax profit would fall below expectations after a difficult first half due to rising costs.
The retailer’s sales and profits have also been on a steady decline over the past year, and pre-tax profits had plunged 29 per cent in its half year results.
Its stock has also lost 60 per cent of its value since August 2016 when shares reached 23p.
Laura Ashley’s latest warning comes ahead of its full-year results for the 12 months ending June 30, which will be released on August 23.