A Superdry store in Germany
Superdry blamed the latest downgrade on a ‘challenging’ retail market and ‘abnormally mild’ autumn weather / Image source: Adobe
  • Hard-pressed fashion retailer warns again
  • Like-for-like sales down 7% in last six weeks
  • Cost-saving programme on track

Embattled clothing and footwear retailer Superdry (SDRY) has disappointed the market yet again, warning trading has been ‘significantly below’ management expectations with full year profits to fall short of forecasts as a result.

Shares in the hard-pressed hoodies, jackets and sweatshirts seller fell 17% to an all-time low of 35p following the pre-Christmas profit warning which left investors in rival clothing retailers feeling nervous ahead of the New Year trading updates.


Superdry blamed the latest downgrade on the ‘challenging’ retail market in the first half to 28 October 2023, as well as ‘abnormally mild’ autumn weather.

Warmer temperatures hit demand for its autumn/winter 2023 ranges, with retail and wholesale revenues down 13.1% and 41.1% respectively in the half.

And while the recent arrival of cooler, damper weather in the UK and Europe has boosted demand for outerwear, like-for-like sales in the six weeks to 10 December were still down around 7% meaning annual profits will disappoint.

Positive takeaways from the update included Superdry’s cost efficiency programme, which remains on track with an initial £35 million of savings expected to be realised within the year, as well as continued progress in clearing aged stock.


Superdry’s charismatic founder and chief executive Julian Dunkerton said the unseasonal early autumn weather led to ‘a delayed uptake of our Autumn/Winter range and this impacted sales in the first half of the year. Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance.’

However, Dunkerton stressed that ‘the operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme.’

AstraZeneca’s lung cancer treatment seen as breakthrough immunotherapy


What does Superdry’s latest warning mean for the wider UK apparel scene heading into Christmas?

Shore Capital’s respected retail-watcher Clive Black suspects that whilst real UK living standards are now on the rise, ‘shoppers are being careful, prioritising groceries, beverages, and holidays over many other product categories’.

Within clothing and footwear, Black senses that some brands, Marks & Spencer (MKS), Next (NXT) and Primark to name but three, are ‘gaining share over the wider market. UK ONS Retail Sales data may provide more colour on these matters this week albeit it is not the most reliable data series.’

Black said Superdry’s earnings alert ‘adds a little tension into the air ahead of the forthcoming New Year trading updates from clothing players. Following on from a quite mellow Black Friday time when UK volumes were at best flat, shopper behaviour in December seems to be quite late in committing to spending with trading only really “getting into gear” across the UK, as opposed to the microcosm of central London in recent days.’

He added: ‘Next kicks off the New Year trading season on 4 January and we would be surprised to see any disappointment from this name’, but the Superdry warning suggests ‘that it and others need to gain share to deliver another nudge up to forecasts’.

Elsewhere, AJ Bell investment director Russ Mould remarked that the true test of whether Superdry is now a basket case would be if Mike Ashley-controlled Frasers (FRAS) takes a stake in the business.

‘The Sports Direct owner likes to make equity investments when rivals are in the gutter and Superdry certainly has enough wounds to qualify,’ said Mould.

‘Frasers rarely wants to buy a business outright, but it does like to build decent stakes so it can have influence on strategy and strike favourable distribution deals.

‘While Frasers is not currently on the shareholder register, it must surely be a matter of time if Superdry continues in its current direction. A selection of Superdry t-shirts and hoodies with Japanese writing are already being sold in Sports Direct and one could imagine the brand having a bigger presence in the future.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.


Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJ Bell logo

Issue Date: 19 Dec 2023