Covid-19 pandemic further hits Superdry’s revenue and profit

Group revenue at Superdry fell by 19.2 percent year-on-year to 704.4 million pounds (904.3 million dollars), which the company said, was driven by a decline in both divisions, with retail declining 18.2 percent and wholesale declining by 20.7 percent. The group’s statutory loss after tax for the year was 143.4 million pounds compared to a 101.7 million pounds loss in 2019, while pretax loss reached 166.9 million pounds (215.6 million dollars) for the year ended April 25 compared with a loss of 89.3 million pounds in fiscal 2019.

Commenting on the company’s annual results, Julian Dunkerton, the company’s Founder and Chief Executive Officer, said in a statement: “As with all retailers, we have experienced significant disruption to our operations, and this has inevitably had an impact on our FY20 results. While our underlying profit has been impacted by trading performance during the year, including Covid-19 related store closures, I am particularly pleased by how strongly ecommerce has performed, with FY21 first quarter revenues nearly doubling year-on-year.”

Review of Superdry’s annual performance

The company further said that in the second half, trading declined 26.6 percent year-on-year, largely due to Covid-19 forced store closures, where the entire estate was closed for five weeks, reducing demand given the general uncertainty in the global economy, affecting all the markets. Prior to the impact of Covid-19 in Week 46, which is when Superdry first saw store closures in Italy, group revenue was down 12.7 percent, declining 71 percent in the remaining six weeks of the year as the pandemic disrupted all areas of the business.

Revenues in the company-owned store declined by 22.7 percent and ecommerce declined 8 percent, which resulted in the retail division delivering revenue of 438.8 million pounds, down 18.2 percent year-on-year. The company said, retail store performance was affected by 0.6 percent space decline in the year, closing seven unprofitable stores to finish the year with 241 owned stores across the UK, Europe and the USA. Like-for-like (LFL) store sales saw a decline of 14.4 percent, following a decline of 9.6 percent in FY19. Superdry added that performance in the company’s largest market, the UK and ROI, saw revenues decline 18.3 percent, predominantly due to the return to a full price trading stance impacting the first 10 months of the year, followed by the unprecedented impact of Covid-19, impacting both store and online trading.

Wholesale revenue of 265.6 million pounds was down 20.7 percent. Wholesale partners with store operations faced the same closures as company-owned retail stores, with a greater proportion of revenues coming from Europe contributing to the adverse impact of Covid-19.

Superdry updates on current trading and outlook

The company said that trading continues to be disrupted, but has improved from the end of FY20 as social distancing measures are relaxed and consumer demand gradually returns. In the balance of the year, Superdry anticipates an improvement in store trading from current levels, though expect LFLs to remain negative on a FY basis, given the pressure on consumer demand and uncertainty relating to any disruption from Covid-19, even considering the comparable trading in March and April when stores were temporarily shut, wholesale sales to see some improvement from current trading levels through in-season sales, with franchise store LFLs in Europe recovering strongly, and normalisation of Spring/Summer forward order shipment timing.

The company expects gross margin impacted by a number of dynamics, with a heavily discounted promotional stance to clear excess stock and generate cash, negatively impacting full price mix year to date, but partially offset by the unwind of FY20 non-trading headwinds.

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