Women's value fashion purveyor Bonmarche (BON) slumps the best part of 25% to 86.5p after posting yet another profit warning.

The latest earnings miss is blamed on September's unseasonably hot weather combined with a more challenging UK clothing market.

In July, the Wakefield-based retailer reported disappointing first quarter sales figures, down 8.1% on a like-for-like basis, yet left full-year guidance unchanged on the assumption trading conditions normalised through the autumn season.

Today, new CEO Helen Connolly concedes 'trading in September has been extremely poor, largely as a consequence of the unseasonably hot weather which has not favoured sales of our new autumn ranges.'

She adds: 'We currently estimate that the store like-for-like sales result for the second quarter will be approximately -8%, and the like-for-like sales for the first half-year will also be approximately -8%.'

Helen Connolly - March 2016

One minor crumb of comfort is the recent heatwave enabled Bonmarche to shift residual summer stock and will result in 'an end of season summer stock holding which is below last year's level, despite the generally poor summer season.'

Bonmarche is bracing itself for a tougher second half and lowers full-year profit before tax guidance (again) to a range of between £5 million and £7 million.

Expecting to close the first half year with £9 million net cash in the coffers, Bonmarche does promise to hold the half-time dividend at 2.5p.

'I was attracted to Bonmarché by its potential to grow as a business serving the 50-plus women's value clothing market. My early impressions of the business have underpinned this, and I am currently formulating my plans for the future,' says the new CEO.

'The direction of travel is right, but the effectiveness of execution needs to improve.

'My plans are therefore likely to focus on improving the clarity of the customer proposition and operational improvements in all channels rather than a major strategic repositioning,' adds Connolly, who is also confident that the business will resume growth during its 2018 financial year.

Bonmarche - Sept 2016

Cantor Fitzgerald analyst Freddie George sticks with his 'hold' rating, but lowers his price target from 130p to 80p to reflect a downgrade to his low-end-of-the-range £11 million pre-tax profit forecast to £6 million, which in turn slashes estimated earnings per share estimates from 17.6p to 9.6p.

George explains: 'We wrote at the beginning of the August that the business in our view, has lost momentum in the last year after its successful IPO.

'The new chief executive, Helen Connolly, previously senior Buying and Design director at "George at Asda", started in her new role in the middle of August. She is likely to revisit the strategy.

'In the meantime, this news is likely to put the stock "under cloud" and it is unlikely to perform in the medium term, although it is relatively good value, and there is evidence of a recovery and a turnaround in sales,' concludes the analyst.

Issue Date: 21 Sep 2016