Moss Bros has reported a slump in its full-year profits despite increased like-for-like sales, which it blamed on a tough retail environment and supply issues.
According to its preliminary results for the full-year period ending January 29, the suit and tailoring retailer posted a 6.1 per cent fall in pre-tax profits to £6.7 million.
Moss Bros said this was because of significant stock shortages and poor implementation of a project to consolidate suppliers, as well as a “tough end of the year” which included the peak Christmas trading period.
Meanwhile, EBITDA fell 2.2 per cent to £13.3 million, which it attributed to the impact of “significant cost headwinds”.
However, total group revenue excluding VAT climbed three per cent to £131.8 million, while group like-for-like sales including VAT edged up by 1.6 per cent to £137.3 million.
Despite this, like-for-like retail sales were 6.7 per cent lower for the first eight weeks of Moss Bros’ current financial year, while hire sales are down 4.9 per cent.
The news comes after the high street chain last week issued its second profit warning, which it put down to “material short-term issues” with stock availability and is working to resolving the issue by spring.
“The group had a disappointing end to the year which was a combination of self-inflicted stock problems and a fragile consumer environment,” Moss Bros chief executive Brian Brick said.
“In spite of this, we made progress throughout the year, building brand equity, alongside significant improvements in our multichannel proposition, leaving us well placed to capitalise on the tailoring expertise which we possess in-store and online.”
He added: “It is frustrating that after a strong first half performance, which continued into the third quarter of the year, the final quarter’s performance was below the level we had forecast.
“We suffered from a significant stock shortage, due to the poor implementation of the project to consolidate suppliers.
“We left ourselves with too little ‘running line’ stock to close out the year having bought cautiously for the second half of 2017. This has continued to hamper our performance into the start of the year.
“Going forward, we are planning for an extremely challenging retail environment, not least because of the uncertain consumer environment and significant cost headwinds.
“However, there is no question that we have hampered our own position through the stock shortages and as this gets back on track, our strong consumer proposition is restoring momentum. We will ensure that we continue to invest in this proposition to protect our position.”