Superdry shares jump on sales boost and shareholder payout despite tough trading
The company reported a 16% rise in revenue in the year to April.
Superdry shares surged as the retailer reported higher sales and its second special shareholder payout in two years despite tough trading conditions.
The company said group revenue rose to £872 million in the 12 months to April 28 from £752 million a year earlier, aided by a near-30% rise in its wholesale division which entered eight new markets over the period.
Online sales meanwhile rose more than a quarter, helping its retail arm log a 9.2% jump in sales.
Superdry said the “overall economic backdrop has not been favourable”.
It faced a challenging end to the year amid a rise in online shopping and “adverse weather” conditions in the fourth quarter, which hit business in the UK, Europe and on the American east coast.
But chief executive Euan Sutherland said that overall, Superdry had “another strong year”.
“We have made good progress in delivering our strategy and significantly strengthened our platform and capabilities, while delivering another year of double-digit growth in sales and profitability,” he said.
Mr Sutherland added: “Whilst the consumer environment continues to be challenging, the board remain confident that Superdry is a uniquely advantaged, highly cash-generative business that will continue to deliver sustainable growth for our investors.
“This confidence is demonstrated through our second special dividend in two years of 25p per share in addition to an 11.4% increase in the total ordinary dividend.”
The company last announced a special dividend in July 2016.
It helped boost shares more than 9.5% in morning trading.
It now expects to deliver a “high single-digit increase” in group revenue for full-year 2019.
Superdry was less upbeat on its bottom line, however, with pre-tax figures slumping 23% to £65.3 million.
It blamed the fall on a £20.8 million charge linked to fair value losses on its forward exchange contracts and a £2.2 million “onerous lease provision” linked to its flagship store in Berlin, which has underperformed on sales and failed to achieve expected returns.
Underlying pre-tax profits rose 11.5% at £97 million.
The company had warned earlier this year that it would miss previous profit targets of £100.6 million due to bad weather, declining margins and amid the multimillion-pound impairment charge on its Berlin site.
But David Madden, a market analyst at CMC Markets UK, said it was a “respectable” set of full-year figures and said the special dividend was a “pleasant surprise” given the downbeat update in May.
He said: “The British high street is suffering from higher business rates, increased employment costs and the rise in online sales, and Superdry is no different.
“The company confirmed that final-quarter same-store sales slipped by 6%. The firm blamed the Beast from the East for the dip in revenue. Relatively high inflation has squeezed consumers’ spending power, and that is also impacting retailers.
“Fortunately, Superdry has successful wholesale and online businesses so it isn’t feeling as much pain as other fashion houses.”
Mr Madden added: “Given the changing trends in shopping habits, the company might look to focus attention away from the high street, and concentrate on the wholesale and online operations.”