Formal menswear retailer Moss Bros has unveiled a strong full-year performance with sales and profits up. Here’s the City’s reaction.
“Final results were ahead of consensus but behind our forecast. The stock has looked expensive on an earnings basis and hence it has traded in a relatively narrow range in the last two years. In our view, it is now due a rerating.
“Earnings, after doubling in the last three years, have real momentum and clear visibility. Several initiatives appear to be crystallising all at the same time leading to a pick-up in earnings growth.
“The 81 refurbished stores, we believe, are comfortably achieving their three-year payback hurdle rates. Hire, after two disappointing years, is recovering. Online sales, which grew 36% in the period, now have real momentum.
“In addition, more longer term, the company is well placed to develop the brand overseas over the medium term. More recently, the company has launched the ‘Tailor me’ promotion, which is currently being tested in 25 stores.
“Encouragingly the new financial year has started well. Following this update we are, for the time being, retaining our full-year pre-tax profit forecast of £6.8m.” – Freddie George, Cantor Fitzgerald
“Slightly ahead of our forecasts, Moss Bros is delivering good growth across all areas. Moss Bros has moved well beyond recovery, having reposition the stores, offer and online to attract a wide demographic of customers, including a much younger shopper.
“Moss Bros has moved well beyond recovery, having reposition the stores, offer and online to attract a wide demographic of customers, including a younger shopper”
John Stevenson, Peel Hunt
“With over 65% of the estate trading in the new format, Moss is delivering a better retail experience, underpinned by a strong product proposition which no longer requires discounted deals to drive footfall.
“It is notable that the sales uplift on refurbishment has remained consistent over the past three years.
“Driven by the introduction of more contemporary products, wedding hire is firmly back into growth. The new wedding season benefits from further new product launches in lounge suits, with new Ted Baker evening wear set for release in autumn winter.
“Product aside, Moss has also invested in better service and quality control. We expect greater focus on training and customer service to further underpin progress in the Retail business.” – John Stevenson, Peel Hunt
“Prelim results are strong but have come in as expected. The outlook is increasingly positive as the business has put systems in place over the past few years, which are only at the start of what we view as achievable and sustainable growth over the next few years.
“We may be entering into a new phase for Moss Bros where market share gains are delivered through a dynamic growth strategy”
Wayne Brown, Liberum
“Having hired some key positions in senior management over the past year we feel we may be entering into a new phase for Moss Bros where market share gains are delivered through a dynamic growth strategy.
“The strong balance sheet supports the high yield while at the same time double earning growth is achievable.
“The retail estate should benefit from the accelerated refit programme with 81 of the 124 stores now trading from the new format.
“The investment in and establishment of a service culture across the business are critically important to the future of the business. The appointment of a people director, Sara Gomez and subsequently a chief operating officer, Paula Minowa, are both integral in the group’s ability to deliver its multichannel growth.” – Wayne Brown, Liberum
“It has been a strong year for men’s formalwear retailer Moss Bros, delivering good growth in retail, hire and online.
“The retailer has been able to cope with a competitive environment through exerting tighter control on promotional activity and stock levels.
“The retailer’s well-prepared multichannel offer also enabled it to prosper during the challenging Black Friday period.
“Moss Bros states it is aiming to generate a stronger brand image, and in many cases this is long overdue, with some of its older outlets looking tired and dated. Interestingly, the retailer has seen its hire website grow in popularity, with it becoming an important early step in the purchase journey for those hiring wedding suits.
“Elsewhere, a reconfiguration of brand architecture is proving fruitful, with a new focus on sub-brands helping it to portray a more stylish figure in the menswear market.
“This has helped to produce a compelling product proposition, which is likely to deliver growth in retail and hire sales going forward.” – Andrew Hall, Verdict Retail
“With like-for-like growth of 8.2%, the new strategy is clearly working, particularly given the challenging market and the results of bigger competitors recently. Updating and modernising the stores, whilst at the same time streamlining the ranges and brands offered have clearly been the right thing to do.
“Renewing the stores has come at a cost but now two thirds of the way through, there is light at the end of the tunnel, and if the sales performance can be maintained the cash flow will only increase further.
“The challenges ahead will be to stay relevant and continue to grow in the ‘proms’ market, which has been growing in the UK in recent years.” – Paul Thomas, Retail Remedy