Moss Brothers forecasts annual loss; sees 'extremely challenging' period ahead
Source - SMW
Mens' suit retailer Moss Brothers said it expected to post an annual loss as its margins shrank, while forecasting an 'extremely challenging' period ahead.
For the 23 weeks between 29 July and 5 January, the company said its sales rose 0.6% on-year, but fell 1.1% on a like-for-like basis.
Margins, meanwhile, had been hurt by heavy discounting to remain competitive.
Moss Brothers said it expected to post an adjusted loss for the year through January of £0.6m, which it said was in line with current revised market consensus.
The company had been plagued by stock shortages last year but said that issue was now fully resolved.
'Total sales improved year on year, despite the challenging consumer backdrop and there has been an improving trend in the fourth quarter,' the company said.
'However, the period post Black Friday required deeper discounting than planned, in order to remain competitive, with gross margin rates impacted.'
Trading gross margins for the first 23 weeks of the second half fell by around 2.6% on-year.
'Despite the improving trend in performance, we anticipate the period ahead will continue to be extremely challenging,' chief executive Brian Brick said.
Brick said the company still faced an uncertain consumer environment and wider political backdrop, and significant cost headwinds from a weaker pound and increases in business rates and employee-related costs.
'We do however see the weaker environment as an opportunity to enhance our specialist market position and strengthen our core brand proposition, so we retain a sustainable point of differentiation,' he added.