Hornby shares fall as retailer’s sales remain below budget
Hornby is on track for annual loss as the model train maker’s sales momentum remains below internal budgets
- Direct-to-consumer sales were up 49% in the last quarter to the end of March
- But Hornby said the group’s sales fell “behind internal budgets” throughout the year
Shares of Hornby fell sharply after the model and collectibles retailer said it was heading for a “modest” loss for the full year, due to rising costs and disappointing sales.
The model train company, which also makes Scalextric cars and Airfix model airplanes, told shareholders sales had improved in the last quarter through the end of March, but internal budgets would not be met.
Direct-to-consumer sales increased 49 percent in the quarter compared to the same period last year.
Retailer Hornby said it remained ‘cautious’ about the year ahead amid the cost of living crisis
However, that was not enough to offset the poor performance during the Christmas quarter, when sales fell short of expectations.
“While group sales and gross margins for the fiscal year ended March 31, 2023 were higher than the previous year, we lagged internal budgets for the full year,” it said.
Hornby shares fell nearly 7 percent to 21.9 pence around noon on Tuesday. They have lost about 37 percent of their value in the past year.
Net debt at the end of March was £5.8m compared to a net cash position of £3.9m at the end of March 2022.
This was mainly due to increased inventories at the end of the year and disappointing sales, the company said.
“We remain cautious on our outlook due to a level of uncertainty about the impact of various factors on our sales, such as inflation, mortgage increases and the rising cost of living for all consumers,” it added.
Hornby will report its annual results in June.