Moss Bros has reported a pre-tax loss of £1.7 million for its first fiscal half year and warned that its full year underlying operating profit would come in “materially lower” than current expectations.
The warning has sent its stock plummeting 20 per cent in morning trading.
In the 26 weeks to July 28 Moss Bros reported total group revenue excluding VAT came in at £64.5 million, dropping 3.3 per cent on last year.
Like for like retail sales including e-commerce were down 6.9 per cent on last year.
Moss Bros added that during its first quarter the business had faced a stock shortage, although this had been corrected by May, when trading improved.
However, the retailer cited the hot weather coupled with “the distraction of England’s success at the World Cup” for the reason behind a reduction in customer footfall for its second quarter, dropping 7 per cent year on year and up to 14 per cent in its worst affected stores.
Moss Bros added it believes the business was negatively impacted by around £2.7 million of retail store sales, which would have delivered a result of £1.4 million of gross profit.
The business went on to state that current trading was back on a steady level, and that it had avoided short-term cost cutting to mitigate its lower footfall in the summer, believing this would have been detrimental to the long-term health of the business.
“The first half trading performance was one of the most volatile for many years. We initially saw sales performance recover well following our previously highlighted early season stock shortages, and sales were generally ahead of expectation,” said Moss Bros chief executive Brian Brick.
“This came to an abrupt end when high street footfall dropped dramatically, impacted by the protracted and unplanned period of extremely hot weather and the widespread distraction of England’s success in the World Cup. Although all retailers were impacted in some way, Menswear was specifically impacted negatively by the combination and longevity of these two external factors.
“The position was exacerbated by the distressed discounting of some competitors, although we have taken the decision to stand firm on pricing where we feel Moss Bros’ product has a strong USP,” he added.
Moss Bros said it was still on track to deliver an operating profit before adjusting items, but that it would be “materially lower than current market expectations of £2.3 million”.