New Look has tough Q1 as sales and profits plunge
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Fashion retailer New Look’s bonds hit fresh lows on Tuesday on the back of poor quarterly results it had just released.
The UK chain’s results showed the company’s adjusted Ebitda declining 37.3% to £27.2m, for the 13 weeks ending June 24.
It said this was due to the challenges it faced in UK sales and investment in strategic initiatives.
Revenue fell 4.4% to £338.7m with New Look Brand like-for-like sales down 8.2%, UK like-for-like sales down 7.5% and own website sales down 0.6%.
While Third Party E-commerce sales rose 15.7%, that was the best news as underlying operating profit fell 60.3% to £12.1m and the loss after tax was £15.2m after a profit of £5.8m a year ago.
CEO Anders Kristiansen said: “As expected, the UK market has remained difficult, which has resulted in a disappointing quarter of trading.
We have managed the business accordingly by controlling costs, tactical investment in our strategic initiatives and enhancing our product proposition.”
He added: “The evolution of our product proposition continues, and will be bolstered by the arrival of our new Chief Creative Officer, Paula Dumont Lopez, in September.
We are pleased with our continued expansion in China, where we opened another 17 stores taking the total number to 127. In the UK, we are now trialling our new store concept and are encouraged by the early results.
Questions & Answers
Q.What were the main financial declines New Look experienced in this quarter?
What were the main financial declines New Look experienced in this quarter?
Adjusted Ebitda fell 37.3% to £27.2m, revenue was down 4.4% to £338.7m, and underlying operating profit dropped 60.3% to £12.1m. The company also reported a loss after tax of £15.2m.
Q.What factors did New Look identify as contributing to the poor results?
What factors did New Look identify as contributing to the poor results?
The company attributed the declines to challenges in UK sales and investment in strategic initiatives. The CEO also stated that the UK market has remained difficult.
Q.What strategies is New Look implementing to address these challenges?
What strategies is New Look implementing to address these challenges?
They are controlling costs, making tactical investments in strategic initiatives, and enhancing their product proposition. The company is also expanding in China and trialling a new store concept in the UK.
Q.What was the only positive sales growth reported by New Look?
What was the only positive sales growth reported by New Look?
Third Party E-commerce sales saw a positive increase of 15.7%. All other reported sales figures, including New Look Brand like-for-like and UK like-for-like sales, declined.
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