N Brown posts drop in H1 profit, revenue

British e-tailer N Brown Group has reported a drop in revenue and profit in the first half of the year amid a tough microeconomic backdrop, and warned it expects that pressure to continue in the second half.

The Manchester-based company’s revenue for the period dropped 4.6 percent to 347.4 million pounds in the 26 weeks to August 27.

Its adjusted pre-tax profit plunged 82.4 percent to 4.3 million pounds, while its adjusted EBITDA fell 46.9 percent to 27.9 million pounds.

The group said its performance “reflected normalisation of financial services post Covid-19 and the macroeconomic environment”.

Pressure to continue in H2

CEO Steve Johnson cited a “difficult period of weakening consumer confidence”, and said the company expects “continued softness in trading” in the second half as “macroeconomic pressures” continue to weigh on shoppers.

As a result, he said the group will focus on tightly managing its costs and margins.

“At the same time, given our ongoing confidence in our strategy and the strength of our balance sheet, we will continue to invest in our digital transformation to deliver sustainable profitable growth,” Johnson said.

In the second quarter, product revenue dropped 9.4 percent, with that rate of decline continuing into September. N Brown said it expects product revenue in the second half to decline at a similar rate.

But it said it expects to see product margin improvements through the group's pricing response to cost inflation, the movement of the product mix back to clothing, and the ongoing initiatives including data usage to optimise pricing strategies.