Moss Bros hails sales progress in ‘challenging’ market

The formal menswear specialist registered a 1% dip in like-for-like sales and a 0.6% uptick in total sales during the 23 weeks to January 5.

Retail sales edged up 0.1% in like-for-like terms and grew 1.9% on a total basis. Online sales recorded a 27.8% spike.

Moss said performance was on “an improving trend” across the first 10 weeks of its fourth quarter, when total sales improved 3.8% year on year.

However, the retailer admitted physical stores in “high-profile retail locations” underperformed as a result of reduced footfall across the 23-week period.

Moss insisted it “continued to make progress in a tough marketplace” and said it had “fully resolved” the stock issues it faced during the first half of the year.

The retailer cautioned that the post-Black Friday period “required deeper discounting than planned”, but said this would not impact its bottom line. Gross margins during its second half fell by around 2.6% compared to last year as a result of the promotional activity.

Moss expects to report a full-year adjusted loss of £600,000, in line with market consensus.

‘Discounting pressures’

Moss Bros chief executive Brian Brick said: “As I noted at the time of our Interim results in September, we had already seen more intensive discounting from our competitors and this has continued throughout the period.

“Having originally sought to resist discounting pressures, we too have found the need to adopt a more tactical, discount-led pricing stance across all retail channels.

“While this proved successful in delivering top-line sales growth, there has been an expected negative impact on gross margin rates, which ensured that the group managed the level of terminal stock.”

Brick added: “Despite the improving trend in performance, we anticipate the period ahead will continue to be extremely challenging, as a result of the uncertain consumer environment, wider political backdrop and the significant cost headwinds that we continue to face from a weaker pound and further increases in business rates and employee-related costs.

“We do, however, see the weaker environment as an opportunity to enhance our specialist market position and strengthen our core brand proposition, so we retain a sustainable point of differentiation.”

Moss will unveil full-year results on March 26.