SuperGroup on recovery path with profit rise

LONDON: SuperGroup, the British company behind the Superdry fashion brand, posted a 13 percent rise in first-half profit, helping to rebuild management credibility after a string of profit warnings in the previous year.

The group, whose celebrity fans include royal favourite Pippa Middleton and singer Ed Sheeran, said on Wednesday it made an underlying pretax profit of 14.7 million pounds ($23.7 million) in the six months to Oct. 28.

That was in line with analysts' expectations and up from 13.0 million pounds made in the same period last year.

SuperGroup said total sales of its trademark T-shirts, hooded tops, check shirts and jogging bottoms rose 16.2 percent to 158.2 million pounds, as the firm started to benefit from strengthened and broader product ranges as well as systems and operational improvements.

Gross margin rose 90 basis points, reflecting falling cotton prices and improved supplier terms.

Sales at UK stores open over a year were up 3.9 percent, while group wholesale sales increased 7.9 percent on a constant currency basis.

In the first six weeks of the second half the group has performed broadly in line with internal expectations and generated positive like-for-like retail sales, it said.

"The economic outlook remains uncertain but I am confident in our strategy and our ability to maximise the opportunities we have in the UK and internationally and deliver our full year profit targets," said Chief Executive Julian Dunkerton.

With Britain facing the prospect of a triple-dip recession, many retailers have been finding the going tough as consumers fret over job security and a squeeze on incomes. SuperGroup has not been immune to the economic downturn.

SuperGroup shares have had a roller-coaster ride since their stock market debut in 2010. After listing at 500 pence the shares rocketed to a high of 1,899 pence in early 2011. But three profit warnings and a litany of management mistakes, including stock availability issues, the botched implementation of a warehouse IT system and "arithmetic errors", led to a dramatic reverse before a partial recovery since the summer.

The stock closed Tuesday at 597 pence, valuing the business at 479 million pounds.