UK clothes retailer Subsequent raises revenue outlook once more

By James Davey

LONDON (Reuters) – British clothes retailer Subsequent on Wednesday raised its full-year revenue outlook for the fourth time in six months because it reported better-than-expected gross sales in a 3rd quarter closely impacted by variable climate.

The group, which trades from about 460 shops within the UK and Eire and has a web-based presence in over 70 nations, is usually thought-about a helpful gauge of how British customers are faring. Its shares had been up 2.6% in early buying and selling, extending 2023 beneficial properties to 21.4%.

Subsequent mentioned full worth gross sales rose 4.0% within the quarter to Oct. 28, forward of steering for a 2% rise. On-line gross sales elevated 6.5%, whereas retailer gross sales fell 0.6%.

The group mentioned gross sales benefited from a cooler-than-average August and typical autumnal climate in late October, however had been depressed by a warmer-than-average September.

“We imagine the volatility in gross sales efficiency is a results of altering climate situations fairly than any underlying modifications within the client economic system,” it mentioned.

Regardless of value of dwelling pressures, UK client demand has usually held up this 12 months.

Nonetheless, official knowledge printed final month confirmed British retail gross sales volumes fell greater than anticipated in September, partly as a result of unseasonably heat climate lowered gross sales of autumn-wear clothes.

Britain skilled its joint-hottest September on document, a part of a warmth wave which rival style retailer H&M mentioned had depressed gross sales throughout a lot of Europe.

Subsequent mentioned it now anticipated pretax revenue earlier than distinctive gadgets for the 12 months to January 2024 of 885 million kilos ($1.08 billion), forward of earlier steering of 875 million kilos and the 870.4 million kilos made in 2022/23.

It’s assuming that full worth gross sales for the remainder of the 12 months shall be up 2.0%.

Analysts at Liberum mentioned they had been optimistic on Subsequent’s prospects, noting its “sturdy money technology, administration foresight, tech capabilities and new extra environment friendly distribution centre capability permits it to discover a number of new avenues for development”.

Subsequent expects inflationary headwinds to proceed to ease in its 2024/25 12 months, however has cautioned {that a} softening of the labour market might dampen development in client demand.

($1 = 0.8229 kilos)

(Reporting by James Davey; modifying by Kate Holton and Tomasz Janowski)