Superdry warns of hit to profits from the long hot summer

Clothing brand Superdry has warned its full year performance will be impacted by a spate of warm weather and additional foreign exchange costs.

The company said on Monday that it expected profits to be £10 million lower due to unseasonably hot conditions across the UK, continental Europe and the east coast of the USA.

Superdry, which is known chiefly for its coats and jackets, makes around 45% of its annual sales from autumn/winter products.

“Superdry is a strong brand with significant growth opportunities, backed by robust operational capabilities, but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,” chief executive Euan Sutherland said.

“We are well prepared for peak trading, but the second half of financial year 2019 presents both risks and opportunities.”

The company anticipates investing £5 million in accelerating growth, particularly in digital, during the second half.

It is also five months into an 18-month product diversification programme, which it says will balance out its reliance on winter sales with a bigger range of clothing items.

The group also pointed to the turbulent retail environment, noting “well-publicised challenges” faced by some of its trading partners.

The collapse of House of Fraser in August left Superdry out of pocket by an estimated £236,000.

Other suppliers to the chain, such as Ted Baker and Mulberry, have already flagged the negative impact on profits which resulted from the administration.

Superdry also said it expected foreign exchange costs to be £8 million higher, after its hedging mechanisms failed to provide the expected level of protection.