Superdry profits hit after 'abnormally mild autumn'

Superdry has warned its profits will be worse than expected, blaming an "abnormally mild autumn" for a drop in sales.

The UK fashion retailer has been cutting costs, clearing stock and selling off assets to try and boost profits.

But warmer weather led to demand for its autumn and winter range falling.

The company's share price dropped to an all-time low on Tuesday after the announcement, before recovering.

The fashion brand - known for its warm coats and hoodies - said revenue fell by 13% over the six months to the end of October.

Overall, retail sales across the UK fell more than expected in September, according to the Office for National Statistics, as shoppers held back buying autumn clothing because of unseasonably warm weather.

Around the world, September was the warmest on record which experts blamed on ongoing emissions of warming gases as well as the El Niño weather event.

Superdry's online sales were affected by reduced spending on digital marketing.

Its wholesale sales dropped 41% in the first half, though this was "to some extent" because Superdry exited its US operation.

Julian Dunkerton, the founder and chief executive of Superdry, said the company had seen "modest signs of improvement through the recent spell of colder weather".

But Superdry said that in the six weeks since the end of the reporting period, like-for-like sales are 7% down.

In a trading update, Superdry said that despite the company making progress, "the external environment has proven challenging and trading performance has been significantly below management expectations".

It added: "Profits for the year are therefore expected to reflect this weaker trading seen to date."

Mr Dunkerton returned as Superdry's boss in 2019, after a lengthy campaign against the previous management, who he said had a "misguided" strategy.

Superdry is on a £35m cost-cutting drive, which include redundancies in its head office and the sale of the rights to its brand in some Asia Pacific countries.

In the UK, last month was the joint-hottest September on record, according to the Met Office.

One scientist described the warm weather, which in the UK included a heatwave at the start of the month, as "absolutely gobsmackingly bananas".

"Whilst more seasonal, so cooler and damper, climatic conditions has helped more recent sales, especially outerwear, they are behind management's budgets and so the earnings outcome can be expected to be weaker than market expectations," said Shore Capital analyst Clive Black.

Shares in the Superdry fell as much as 32.5% to an all-time low of 28.2p.