Moss Bros reveals impact of ‘self-inflicted’ stock shortages and high street woes
The group posted a 6.1% fall in annual profits to £6.7 million and revealed that sales had slumped 6.7% since the start of the new financial year.
Suit retailer Moss Bros has laid bare the impact of stock shortages and “extremely challenging” high street trading as it revealed falling profits and an ongoing hit to sales.
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The group – which has warned over profits twice since the start of the year – posted a 6.1% fall in pre-tax profits to £6.7 million for the year to January 27.
Moss Bros said the supplier woes and stock shortages which have been hampering trading since the end of last year have continued, leaving like-for-like retail sales 6.7% lower for the first eight weeks of the new financial year.
Hire sales also remain under pressure, down 4.9% in recent trading.
There is no question that we have hampered our own position through the stock shortages Chief executive Brian Brick
The group sparked a shares crash last week after its latest profit warning saw it alert that the result for the year to January 2019 would be “materially lower” than expected.
Moss Bros also slashed its full-year dividend by 32% to 4p to ensure it could
make future payments to shareholders.
Shares fell another 3% on Tuesday after its 2017-18 results offered little cheer, adding to a bleak start to the year for the retail sector amid a raft of rescue deals and the high profile failures of Toys R Us and Maplin.
Brian Brick, chief executive of Moss Bros, admitted the chain’s trading troubles were in part “self-inflicted” as the mistakes over changes to suppliers compounded wider troubles on the high street.
He said: “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.”
Moss Bros expects to resolve the stock shortages by late spring, but this will be too late to prevent a hit to this year’s results.
Moss Bros, which has 129 stores across the UK, said trading had worsened rapidly in the fourth quarter after a strong performance throughout the rest of the year.
Overall, group like-for-like sales rose 1.6% in the year to January 27 as a 2.9% rise in retail offset a 6.2% slump for its embattled hire division.
Richard Hunter, head of markets at Interactive Investor, said: “Last week’s profit warning may have taken some of the sting out of the situation, but Moss Bros is already facing an uphill struggle for the remainder of its trading year.
He added: “Having dropped 53% over the last six months and 33% over the last month alone, these are torrid times for a previously well regarded stock.”