StockMarketWire.com - Fashion brand Superdry said that trading continued to be "weak" and expected its underlying profits for the full year to be below analyst forecasts.

Although its Global Brand revenue increased 3.6% to £1.736bn in the 13-week period to 27 April, Group revenue was flat year on year and declined 3.5% in the fourth quarter.

Wholesale and ecommerce performance were hardest hit, with fourth-quarter revenue dropping 9.3% and 3.9%, respectively, year on year.

The decline in wholesale revenue was driven by increased levels of returns, lower than anticipated in-season orders and decisions not to ship to customers that had reached their credit limits. Online performance, meanwhile, was impacted by the reduction of year-on-year discounting, including the removal of planned promotional activity at the end of the fourth quarter.

However, following management changes on 2 April, initial actions to stabilise performance and improve the long-term prospects of the company were already being implemented.

This had led to an improvement in store performance, with revenue growing 2.2% in the fourth quarter, but down 3.7% to £373m year on year.

Interim Chief Executive Officer Julian Dunkerton has already identified immediate opportunities to improve the efficiency and performance of the business, and taken action to implement these opportunities.

These actions had included: increasing the number of options sold online with those additional options generating full price sales; repopulating selected flagship stores with a greater density of stock; reducing unnecessary promotional activity resulting in enhanced margins and strengthening the brand; and the introduction of 500 new products to be introduced in the first six months.

"My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the Ecommerce proposition, which are two important steps towards addressing Superdry's recent weak performance.

"The impact of the changes we are making will take time to come through in the numbers but I'm confident we are heading in the right direction," said Julian Dunkerton, Interim Chief Executive Officer.



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