Suit tailoring retailer Moss Bros has warned over profits after sales suffered a triple whammy from stock shortages, low footfall and sluggish suit hire demand.
The group said profits would be “materially lower” than current market expectations for the year to January 26 2019, as the cocktail of pressures took its toll on trading.
Shares crashed more than 28% shortly after the London Stock Exchange opened, as the firm moved to slash its full-year dividend by 32% to 4p to ensure it could make future payments to shareholders.
It marks the second profit warning issued by the firm since the start of the year after it endured a “very tough” December.
Moss Bros chief executive Brian Brick said the retailer was taking action early to protect the “underlying strength” of the business, as it faces up to a “very challenging” year ahead.
He said: “The beginning of the year has been hampered by short-term stock delivery issues caused by the consolidation of our supplier base.
“The resulting stock shortage has undoubtedly driven a significant shortfall in sales, which will continue until late spring.
“Although this has been a painful experience, I am confident that the availability issues are well on track to being resolved and the margin benefits from the consolidation will flow through.
“This stock shortage has led to a disappointing start to the year and, whilst we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short-term weather impacts has led to a readjustment of our profit expectations to protect the group’s longer-term investments.”
The bleak update adds to the prevailing gloom across the British high street, with Carpetright eyeing store closures as part of sweeping restructuring plans and Mothercare looking to secure additional financing to help fend off tough trading conditions.
Moss Bros, which has 129 stores across the UK, said results for the year ending January 27 2018 would be in line with expectations.