Matalan forced to discount amid disappointing summer weather
Value high street brand Matalan saw sales increase in the first quarter, but said it had been forced to discount stock earlier than planned amid disappointing weather.
Matalan reported revenue growth of 2.9% to £273.5 million for the 13 weeks to May 25, up from £265.9 million in the same period of 2018.
The brand said sales grew both in store and online, with the latter up almost 30%.
Underlying profits were flat on this time last year at £25 million, though this was recorded using its previous accounting standards.
Under the new measure, earnings were £50.4 million.
Chief executive Jason Hargreaves warned that the disappointing weather had led to rivals cutting prices on seasonal summer stocks sooner than anticipated, pushing Matalan to use similar promotions.
“Whilst having a manageable impact on the first quarter’s results, there will be more significant dilution to margins in the second quarter as we exit the summer season,” he said.
He added that Matalan would continue to refurbish its stores and improve its online offering, as part of a “customer-centric approach”.
“Whilst we react to immediate trading conditions, we remain confident in the longer term direction and progress we are making,” he said.
The chain opened new stores in Leeds, Bracknell and Wolverhampton in the period.
It also closed the period with higher levels of cash than last year, coming in at £71.2 million versus £60.5 million.