Superdry drops full-year guidance
Superdry has announced it is facing “unprecedented challenges” from Covid-19 and has temporarily closed stores in a number of countries.
The British fashion retailer also announced it would not meet the guidance given on 10 January and would accordingly no longer be giving formal guidance for the 2020 financial year.
Prior to the global Covid-19 outbreak, the company expected its store estate to generate between 5 and 6 million pounds in sales per week for the remainder of the financial year.
As of Tuesday, 78 Superdry stores across Europe have been closed. That accounts for the majority of its European store estate which normally contributes around 40 percent of weekly sales forecast.
In the UK and the US, where stores remain largely open, footfall has been significantly impacted, down an average 25 percent week-on-week. These markets represent around 50 percent and 10 percent of weekly sales forecasts, respectively.
The company said it does not expect its online sales to fully mitigate the drop in physical store sales.
Given the performance to date, we do not expect the decline in sales from our retail stores to be fully mitigated by sales through our Ecommerce channel, which remains fully open for business. Whilst we are also pursuing cost saving measures across the business, we do not expect these to be sufficient to offset the sales decline.
On a brighter note, the retailer said it had “a strong position” of 47 million pounds net cash on its balance sheet.
Superdry CEO Julian Dunkerton said in a statement: “Along with everyone else, Superdry is experiencing major disruption to our business operations and recovery as we seek to protect our staff and customers from COVID-19.
“We are taking mitigating action wherever we can but the situation is very fluid and uncertain, and we are working to put in place additional financing to secure our recovery. We also welcome the measures announced by the Chancellor yesterday to support UK businesses.
“The safety of our staff and customers remains our number one priority and we continue to take all appropriate action in line with local government advice. Together, we're going to make our way through this unprecedented challenge, and I'm confident we can reset the brand and deliver on our transformation plans."
Nordstrom shuts stores, withdraws fiscal 2020 outlook
To do its part to limit the spread of the virus, Nordstrom Inc. will temporarily close its stores, including Nordstrom full-line, Nordstrom Rack, Trunk Club clubhouses and Jeffrey in the U.S. and Canada for two weeks, effective March 17. Nordstrom said in a statement that it continues to serve customers through its online business, which made up one-third of sales in 2019. Keeping the uncertainty of the situation and its impact on the business in sight, the company said, it is also retracting its full year guidance issued on March 3, 2020.
“During this unprecedented period of uncertainty, we have in place the appropriate business continuity plans, operational framework and team. This, in concert with ending 2019 with a solid financial position and healthy balance sheet, gives us the ability to weather this challenging moment in time,” said Erik Nordstrom, CEO of the company.
The company added that its fiscal 2020 guidance issued on March 3, 2020 did not include the impact of COVID-19 and due to heightened uncertainty relating to the impacts of the situation on its business operations, Nordstrom is withdrawing its 2020 guidance.
Nordstrom had announced that for fiscal 2020, the company expected net sales to grow in the range of 1.5 percent to 2.5 percent, EBIT to range between 815 million dollars to 855 million dollars, EBIT margin between 5.3 to 5.5 percent and earnings per diluted share in the range of 3.25 to 3.50 dollars.
The company further said that while February sales were in-line with expectations, it experienced a broad-based deceleration in customer demand over the past couple of weeks, particularly in markets most affected by the virus.
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Photo credit: Superdry, Facebook,Nordstrom press room