Superdry Share Price Rallied 10% but Later Fell on a Weak Outlook

The Superdry PLC (LON: SDRY) share price rose 10% today despite the lack of news releases from the company but later gave up most of its gains. The lack of current news from the fashion retailer makes us look into past releases to assess the state of its business. 

The fashion retailer recently appointed PricewaterhouseCoopers (PwC) to help it restructure its debt and solidify its finances following the weak trading witnessed towards the end of last year, as outlined in a profit warning issued in December. 

At the time, the company warned that during the initial six months of its financial year, it faced a challenging retail environment for consumers, further compounded by a hot autumn season. This led to a slower demand for its Autumn/Winter 23 line.

The company experienced a 13.1% decrease in retail sales compared to the previous year. This decline was observed across both physical stores and online platforms. The milder weather conditions and a delayed start to the company's seasonal summer sale contributed to this downturn. Additionally, online sales suffered due to a strategic decrease in spending on digital advertising to boost profits.

The company's wholesale revenue also saw a significant drop of 41.1% compared to last year. This decline was partly anticipated, as the company had chosen to withdraw from its wholesale operations in the United States.

Despite noticing some positive signs, the company's sales in the six weeks following the half-year mark have continued to lag, showing approximately a 7% decline on a comparable basis.

Julian Dunkerton, Superdry’s Founder and CEO, said: “Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance. The operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme.”

Superdry share price. 

The Superdry share price rose 10.06% higher to trade at 18.6p from Thursday’s closing price of 16.9p.