Source - Alliance News

Shares in Group PLC plunged on Monday after the furniture retailer lowered its guidance for 2022 due to ‘highly challenging’ market conditions.

Shares in the London-based firm were trading 15% lower at 54.20 pence each on Monday morning in London.

Made reported that trading has been volatile and more challenging than anticipated in recent months.

It said that ‘third-party data’ suggests that the online furniture and home market is down 30% to 40% so far in 2022.

The retailer stressed that compared to the market, its gross sales were down ‘only’ 10% in the first quarter of 2022 versus the same period in 2021. Compared to the first quarter of 2019 gross sales were up 64%, Made added.

Nonetheless, the company lowered its full-year guidance based on the weak market backdrop.

‘We now assume the market will remain highly challenging for the rest of 2022 despite the significantly easier comparatives for the second half,’ it said.

Made expects gross sales to remain flat or to decrease by a maximum of 15% compared to the year before now. In 2021 gross sales amounted to £434.0 million. In March, the company initially guided for full-year gross sales of £500 million to £540 million, reflecting a 15% to 25% increase in 2022.

Net revenue is forecast to increase by a maximum of 8% or fall by up to 7%. In 2021, Made generated revenue of £371.9 million. It originally expected revenue of £465 million to £500 million in 2022, representing 25% to 35% growth.

Made noted that it is still confident it will outperform the online home and furniture market by at least 20 percentage points. It said spot freight rates continue to normalise in line with previous expectations, but stated that lower sales mean the benefit will be reflected in gross margin later in 2022 than expected.

‘There is no escaping the tough trading environment at the moment. However, we are laser-focused on executing our strategy and we are delivering strong progress across each of our strategic pillars,’ Chief Executive Nicola Thompson said.

‘Made continues to outperform the online furniture and home market and I am confident the company will emerge in a very strong position,’ she added.

Made, separately, announced the appointment of Patrick Lewis as chief financial officer with effect from June 27. He gained ‘valuable insight’ into Ecommerce while he worked as a non-executive director at Ocado Group PLC. Further, he was previously employed as CFO on the John Lewis Partnership PLC board.

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