Superdry issues profit warning amid warm weather & foreign exchange impacts

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Superdry profit warning

Superdry has issued a warning for its full year performance, blaming the spate of unseasonably hot weather and additional foreign exchange costs.

The fashion retailer said it expected profits to be £10 million lower due to the warmer-than-usual summer across the UK, continental Europe and the east coast of the US.

Superdry is known chiefly for its coats and jackets and makes around 45 per cent of its annual sales from autumn/winter products.

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

“We are well prepared for peak trading, but the second half of financial year 2019 presents both risks and opportunities.”

The retailer anticipates investing £5 million in accelerating growth, particularly in digital, during the second half of its fiscal year.

Superdry is also five months into an 18-month product diversification programme, which aims to balance out its reliance on winter sales with a bigger range of clothing items.

The company also highlighted the turbulent retail market, noting “well-publicised challenges” faced by some of its trading partners.

For example, the collapse of House of Fraser in August left Superdry out of pocket by an estimated £236,000.

Superdry also said it expected foreign exchange costs to be £8 million higher, after its hedging mechanisms failed to provide the expected level of protection.

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