Shares in fast-fashion brand Quiz (QUIZ:AIM) rallied 3.3% to 19p after the retailer reported a first half sales rebound and a narrowing of underlying losses, as well as a return to profitability at the underlying EBITDA level, as the return of social events boosted demand for its products.
The Glasgow-based purveyor of occasion wear and dressy casual wear also said sales more than doubled year-on-year in the two months to November 2021.
However, Quiz also warned the emergence of the Omicron variant is a concern and the potential for Christmas and other social events to be disrupted or cancelled ‘would be expected to negatively impact short term demand’.
BOUNCING BACK INTO FASHION
Group revenue increased by 109% year-on-year to £36 million in the half to September 2021 and underlying losses before tax narrowed from £5.6 million to £1.3 million, as the removal of Covid lockdowns and social restrictions boosted demand for the retailer’s occasion and dressy products.
By the end of the half, like-for-like sales had returned to pre-Covid levels, insisted Quiz.
The omni-channel fashion brand generated encouraging online growth in the half, while its restructured brick and mortar store portfolio, now benefiting from less onerous lease arrangements, made a positive contribution in the period and international sales also staged a welcome recovery.
Gross margins improved from 51.7% to 57.5% thanks to a higher level of full price sales and reduced discounting as consumer demand returned.
RAMZAN REMAINS CONFIDENT
Tarak Ramzan, founder and CEO, commented: ‘Quiz has delivered an encouraging set of results during the period with strong cash flows generated and a return to positive EBITDA. The positive steps taken over the last 18 months with regards to restructuring our business, tight cost control and inventory management have all proved beneficial.’
Whilst mindful of short-term uncertainties, Ramzan remains ‘confident in the strength of our brand’ and is ‘highly confident that the clear demand for Quiz’s trademark occasion-wear will support continued profitable growth.’
