Womenswear fashion retailer QUIZ (QUIZ:AIM) expects revenues to fall by about 5% this year, according to a first half trading update. The £63.3m sales prediction is as the market was largely anticipating, leaving the share price fl;at at 16.68p.
Investors may be relieved and thankful that the trading update didn’t include another revenue and profit warning. There is even some encouragement to be taken from the comment that ‘the rate of decline experienced has reduced in recent weeks.’
Underlying on-line sales improved by 12% year-on-year to £20m while the UK stores saw an 11% decrease to £31.3m. International sale improved by 3% to £12m reflecting growth in the Spanish franchise operations, partially offset by a decline in Irish sales.
STIFF HEADWINDS TO BATTLE
Management has been battling the poor trading conditions on the high street and has taken actions to make cost savings of £2m to £3m in the medium-term.
Chief executive Tarak Ramzan said, ‘the Board remains confident that underpinned by QUIZ's flexible business model and an increasing online focus, the Group can return to sustainable profitable growth in the medium term.’
The average lease length is 26 months which gives the company some flexibility to appraise the profitability of each store as the lease comes up for renewal.