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Superdry PLC

Superdry Plc Significant progress in the first half

Superdry Plc (LON:SDRY), the Global Digital Brand, today announced a trading update covering the 26-week period to 27 October 2018 (the ‘half year’ or ‘period’) in line with the guidance given on 15 October 2018.

Performance Highlights

Revenue1,2

26 weeks to 27 October 2018 (“H1 FY19”)

£m

26 weeks to 28 October 2017 (“H1 FY18”)

£m

Growth

Global Brand revenue3 (exc. China)

831.8

781.6

6.4%

Group revenue

414.6

402.0

3.1%

Channel revenue

Wholesale

171.8

159.3

7.8%

Ecommerce

65.4

61.2

6.9%

Store

177.4

181.5

(2.3%)

Average retail space (‘000’s sq. ft.)

1,186

1,084

9.4%

 

 

· First half Global Brand revenue up 6.4% against a challenging backdrop

· Ecommerce channel revenue grew 6.9%, underpinned by owned Ecommerce site revenue growth of 14.0%

· Trading performance impacted by unseasonably hot weather conditions, as previously announced

· Continued execution of our product diversification and innovation programme

· Ongoing roll out of RFID technology across owned store network

Superdry continued to focus on its four strategic pillars across the half year:

Global Digital Brand

We have enhanced our B2B digital platform, allowing our global Wholesale partners to place forward orders online, in addition to the existing in-season capability. This platform significantly improves our partners’ buying experience, as well as creating incremental brand sales opportunities through recommendations and curated ranges.

The 2018 Invictus Games took place in October in Sydney for which Superdry designed, manufactured and delivered almost 8,400 items of clothing for the UK team, delegation and their supporters as their Official Clothing Supplier. The Invictus Games generated global media exposure for the brand as well as allowing us to extend our Sports capabilities and strengthen our partnerships with the UK team and Help for Heroes.

Relentless Innovation

We have increased our focus on product innovation with the introduction of our first menswear Orange Label
T shirts made with 100% organic cotton. Superdry has committed that all of its cotton will be 100% organic as part of our SuperResponsible40 strategy.

We have also made strong progress on our denim offer in the past six months, introducing a premium womenswear range which includes Superflex, using dual flex fabric technology that provides 360 degree stretch, and Superthermo, which is brushed on the inside making the garment super soft as well as giving an extra layer of insulation.

Operational Excellence

We continue to roll out RFID in owned stores and are on track to complete our implementation across the owned portfolio by autumn 2019. In the 30 stores that are currently RFID enabled Superdry has seen faster, more targeted and more efficient replenishment of stock allowing store colleagues additional time to focus on sales and improving Superdry’s working capital efficiency.

We have now fully integrated Wholesale, Ecommerce and Retail inventory into a single stock pool in our EU distribution centre, and enabled Ecommerce fulfilment from our US distribution centre. As well as enhancing our delivery proposition to customers in this market, this capability also opens up further distribution opportunities through third party Ecommerce partners.

World Market Opportunity

We are rebalancing our physical space expansion programme, with net growth of 33 additional franchise stores across 22 different countries in the period. A new localised Ecommerce site has been launched in Ireland in October.

We continue to make good progress in the US and China. In China, we have added a further 20 franchise stores in H1, leveraging our network of regional partners to grow our portfolio of franchise stores to 35 locations. Our strategy of capital-light growth in the US continues to be successful, with full price US Wholesale revenues growing by 39% in the period.

Outlook

While some of our key markets saw colder weather conditions last week, with the result that our sales performance in those markets was more typical for this time of year, we have not yet seen a sustained period of seasonally typical weather. As highlighted previously, the Company’s full year profits are heavily influenced by its performance in the second half, led by cold weather products with jackets and sweats accounting for 55 to 60% of autumn winter sales.

Commenting on Superdry’s performance Euan Sutherland, Chief Executive Officer, said:

“Superdry has made significant progress in the first half. We are six months into a product diversification and innovation programme and, as we said in the summer, it will take up to 18 months for the benefits to come through. In the meantime we are well prepared for peak trading and the team remains highly focused on the delivery of sales growth and further efficiencies in the remainder of the year.

“Superdry is a strong brand with significant growth potential, based not only on product diversification and innovation, but also on our category extension and geographic expansion opportunities and our ability to leverage our multi-channel operating model to serve customers in whichever way suits them best.”