Quiz profits rise despite House of Fraser hit and ‘challenging’ market
Fashion retailer Quiz has notched up a hike in half-year sales and profits despite “challenging” market conditions and a hit from the administration of House of Fraser.
Quiz said pre-tax profits increased 4% to £3.8 million over the six months to September 30 as group revenue rose 19% to £66.7 million.
It comes despite a £400,000 provision for the House of Fraser administration and £1 million of costs related to the company’s AIM listing and restructuring.
Underlying earnings rose 11% to £5.6 million in the first half, but this is still lower than previously expected, as flagged up in a profit warning from the group last month.
Quiz alerted to a profits blow in October due to poor sales from online partners and the House of Fraser impact, which sent shares in the group tumbling 37% on the day.
Chief executive Tarak Ramzan said: “Quiz has continued to deliver good revenue growth in the first half of the financial year despite challenging external market conditions.
“This performance was driven by further expansion across each of the brand’s distribution channels with particularly strong sales generated online through Quiz’s websites.”
Revenue from UK stores and concessions increased 9% over the half-year to £35.1 million, while international sales rose 16% to £11.6 million.
Online sales jumped 44% to £20 million and now represent 30% of group sales, having been bolstered by an 89% surge in active online customers to 495,000 over the half-year.
Despite the double-digit online sale growth, the company said sales via third party websites were below its expectations and were at a similar level to the year earlier.
On an underlying basis, pre-tax profits fell 11% to £4.2 million due to the lower-than-anticipated sales and higher costs related to personnel and marketing.
Underlying profits exclude the House of Fraser hit.
Quiz said it is “working with our third-party online partners to address this trend” and that during the period the group invested in its distribution centre and increased staff.
Quiz has more than 300 stores, concessions, franchises, wholesale partners and global online partners.
In the eight weeks to November 24, sales, excluding those from international franchises, were up 10% year-on-year, boosted by sales from its website.
Quiz said full-year results are dependent on trading during the key Christmas period, but that the group is “well positioned to deliver long-term profitable growth”.