The Works upgrades outlook after “record” Christmas

The Works
// The Works revenue increases and upgrades EBITDA outlook
// It recorded a two-year like for like sales growth of 14.5%, ahead of board expectations

The Works has reported an increase in revenue and upgraded its EBITDA outlook for the 2022 financial year.

The arts and crafts retailer said revenue rose 30.6%, and 17.9% compared to pre-pandemic performance.

It also reported a loss before tax of £1 million in its interim results, an improvement on the prior year, which was a loss of £4.3 million.

READ MORE: The Works insists profits will meet expectations as it counts ‘significant’ supply chain costs

The Works recorded a two-year like for like sales growth of 14.5%, ahead of its board expectations, while store two-year like for like sales increased by 7.3% and online sales by 80.7%.

In November, The Works said that some Christmas trade was brought forward into September and October and, therefore, the slight reduction in the rate of like for like growth compared with H1 FY22 was anticipated.

However, sales in the week immediately prior to Christmas were less affected than expected by concerns relating to the rapid development of the Omicron variant.

Meanwhile, proactive management of the supply chain ensured that it had adequate stock despite some of it arriving later than planned.

Due to the strong sales during November and December, terminal stock levels were low, reducing the need for significant markdown in the January sale.

This looks to benefit the gross margin percentage and/or the level of stock provisions required at the end of the financial year, albeit higher freight costs will continue to affect margins in the second half of the year.

“Our performance in the first half shows that our improved customer proposition, clarified purpose and the successful execution of our strategy are delivering tangible results,” The Works chief executive, Gavin Peck said.

“We delivered a record Christmas, demonstrating the increasing appeal of our customer offer and despite uncertainty over the impact of Omicron and the ongoing supply chain challenges faced throughout our sector.”

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