Menswear chain Moss Bros has warned that its full year operating profits will fall short of expectations, hit by slow sales during the hot summer and compounded by staying away from the shops to watch the World Cup.
The struggling retail and suit hire company said it is still on track to deliver an operating profit before adjusting items, that it would be “materially lower than current market expectation of £2.3m”.
The warning comes as the company revealed a loss of £1.7m for the half-year to 28 July, compared to £3.9m profit for the same period last year.
Moss Bros chief executive Brian Brick said trading performance over the period “was one of the most volatile for many years,” blaming the slow footfall on extreme weather conditions – at both ends of the half year – and the World Cup.
He said: “We initially saw sales performance recover well following our previously highlighted early season stock shortages, and sales were generally ahead of expectation.
“This came to an abrupt end when high street footfall dropped dramatically, impacted by the protracted and unplanned period of extremely hot weather and the widespread distraction of England’s success in the World Cup.
“Although all retailers were impacted in some way, menswear was specifically impacted negatively by the combination and longevity of these two external factors.”
Mr Brick said those effects were compounded by distressed discounting by competitors, as Moss Bros held firm on pricing.
Moss Bros, which has 130 stores across the UK, said customer footfall was down by an average of 7% year-on-year, while its worst affected stores saw a 14% drop.
It estimates that it was negatively affected by around £2.7m of retail store sales, which would have delivered around £1.4m in gross profit.
It said online shopping and distribution via third party marketplaces were less affected and “continued to achieve positive momentum”.
Shares plunged a massive 29% on opening, as the markets woke up to the company’s third warning related to annual profits this year, after it revised estimates for the year to 27 January to
(c) Sky News 2018: Moss Bros warns hot World Cup summer hit annual profit