N Brown Group revenue for the year to March 4 2023 fell 5.3 percent to 677.5 million pounds, reflecting challenging online market conditions.
The company said that product revenue declined 6.9 percent, with strategic brands down 5.3 percent. Lower retail sales, net of higher customer credit penetration, led to lower FS revenue, down 2.4 percent.
Commenting on the trading update, Steve Johnson, N Brown’s chief executive, said in a statement: “We have remained adaptable to the trading environment which became more challenging during the year, as inflation impacted both our customers and our cost base.
“Although volumes softened, we maintained a disciplined approach to trading, with a particular focus on upholding margin despite a promotional backdrop.”
Adjusted EBITDA fell to 57.3 million pounds from 95 million pounds the prior year, while adjusted profit before tax narrowed to 7.5 million pounds from 43.1 million pounds.
During the year under review, the company strengthened its board with the appointment of Meg Lustman as an independent non-executive director, and Dominic Appleton as CFO.
N Brown added that the company is well positioned to deliver strategic change with a step-up in investment in FY24, aligned to a number of medium-term transformational priorities including new websites for Jacamo and JD Williams, and the delivery of new FS technology platform.
‘Weaker consumer confidence’ expected to continue
The company further said that the previously guided softer product revenue seen in Q4 FY23, down 17.8 percent year-on-year, has broadly continued into the first quarter and poor early spring weather.
N Brown continues to expect challenges of a high inflationary environment and low consumer confidence to remain throughout FY24 and currently expect full year product revenue to decline at a slightly improved rate to that seen in FY23.
The company currently expects FS revenue to decline at a rate slightly adverse to that seen in FY23 of 4.3 percent and the FS gross margin rate of 49.3 percent and adjusted EBITDA margin around 1ppt lower than the prior year.
“We are expecting the weaker consumer confidence to continue weighing on our performance before we see a return to growth and are therefore keeping a tight control of costs,” added Johnson.