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Moss Bros warns on profits after 'tough' December
Hot on the heels of profit warnings from Debenhams and Mothercare, specialist menswear retailer Moss Bros warned on Wednesday that full-year pre-tax profit was likely to come in "slightly below" current market expectations due to lower-than-anticipated footfall in December.
The company now expects to report a full year profit before tax in range of £6.5m to £6.8m.
For the 23 weeks to 6 January, total sales were up 1.1% versus the year before, with total retail sales, including e-commerce, up 1.6%. However, like-for-like total sales were down 0.1%, while on an LFL basis, retail sales including e-commerce were up 0.4%. Retail sales now account for 90% of the business.
The company said the year ahead looks set to be "extremely challenging" due to the uncertain consumer environment, wider political backdrop and significant cost headwinds from a weaker pound, business rates and increasing employee related costs.
Chief executive officer Brian Brick said: "Having made considerable progress in building a strong, profitable, cash-generative menswear business which has outperformed the market in recent years and despite continued progress throughout much of 2017, we faced a very tough December trading environment, which led to a significant reduction in store footfall and a hardening of the corresponding competitive environment in which we operate.
"This, coupled with strong cost headwinds and a desire to protect margins, led to a disappointing year end short fall to sales and subsequently to our anticipated profits for the full year. This is all the more frustrating given that we have continued to make progress with LFL retail and online sales and with our Hire proposition."
ETX Capital analyst Neil Wilson said the warning was "not entirely surprising given they do nothing online (13% - it should be more for a clothing retailer I think and the 12.3% growth is not amazing) and they are entirely UK focused."
At 1400 GMT, the shares were down 16% to 75.60p.