Superdry shares tumble 20pc on profit warning

LONDON, UNITED KINGDOM MAY, 2017: Logo of a Superdry Store. Superdry clothing design and manufacturing company, founded in London.

Superdry has warned of a £10 million hit to profits, causing shares to dive 20%.

The summer heatwave and unusually warm autumn led to the fall in sales for sweatshirts and jackets, which usually account for 45% of the group’s annual sales.

“We are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,” said Superdry’s chief executive, Euan Sutherland. 

“We are well prepared for peak trading but the second half of the financial year 2019 presents both risks and opportunities,” he added.

Profits up to the end of April 2019 are expected to be down by £10 million following the difficult high street conditions and warmer weather over summer.

The drop in profits sent shares tumbling 20% to 820p. In early January shares peaked at £20.49.

The group also faced additional costs of  £8 million as the retailer warned that hedging against currency movements did not work out as expected.

Superdry has 102 stores in the UK and a total of 246 worldwide.

In order to decrease reliance on warm outerwear, the retailer is attempting to sell more dresses, skirts, women’s tops and denim.

Due to the difficult high street conditions, Superdry has also announced plans to invest £5 million in digitisation, automation and product development to “adapt stores for a digital world”.

Superdry co-founder,  Julian Dunkerton, sold £18 million of shares in January this year, at £17.80 a share. In July, he sold £71 million of shares at £12.85 a share.

Dunkerton hit the headlines in August when he gave £1 million to the People’s Vote campaign, a campaign that is calling for a referendum on the final Brexit deal.

James Holder is the other co-founder, who still retains a stake of 18.5% of the retail group.

Retail analyst Nick Bubb said Superdry’s hit to profits was to be expected given the warmer weather,  however, he described the £8 million hit that was caused by exchange rate factors as “mysterious”.

Shares in the group (LON: SDRY) are currently trading down 20.25% at 809,50p.