Quiz shares fall 20% as sales slump and fashion retailer warns of ‘diminished visibility’ for year ahead amid spending pressures
- Sales in February and March were lower than last year, Quiz said
- It blamed the crisis in the cost of living and strong comparisons to last year
- Annual turnover is up 17% to £91.7m; profit of £2 million, an increase of £800,000
Fashion retailer Quiz has said sales fell in February and March as customers tightened their belts, causing shares to plummet.
The group also warned that consumer spending pressures will continue and could affect demand for its products, reducing visibility for the year ahead.
Quiz sells party wear and dressy casual wear through its 62 stores across the UK, as well as 62 concessions in stores such as New Look.
Quiz has warned that the cost-of-living crisis is affecting demand for its women’s clothing
The London-listed company stressed that sales in the first three months of the year were “broadly consistent” with pre-pandemic levels.
It added that the dip in February and March was partly due to strong comparisons to last year, when the easing of Covid restrictions boosted sales.
Investors, however, were not convinced Quiz shares tumble 20 percent to 12.30p in early trading. They’re down about 17 percent over the past year.
The company said last spring’s sales growth after Covid restrictions eased had softened as inflation began to affect consumer confidence.
“As a result of these external headwinds and in part due to last year’s strong comparatives, like-for-like earnings in February and March 2023 were lower than the prior year,” it told investors.
“Despite the challenging market conditions of recent months, Group sales in the last three months of FY23 were broadly consistent with those of the comparable period in FY2019, the last period unaffected by factors related to the coronavirus.”
The company released the trading update ahead of its full-year results to the end of March, which are expected to show a 17 per cent rise in revenue to £91.7m and profit of £2m, up from £800,000 last year .
Chief executive, Tarak Ramzan, said the “good” performance was achieved “despite the challenging market environment in recent months” in “strong evidence of our flexible model and differentiated brand.”
“While the external trading environment is expected to remain challenging in the near term, we are very confident in the Group’s long-term prospects,” he added.
Last week, fellow fashion retailer Superdry also blamed “factors beyond the company’s control” for disappointing sales, including the cost-of-living crisis and inclement weather fueling demand for its spring-summer collections.