Quiz has issued a fresh profit warning after sales during the crucial Christmas trading period fell “below expectations”.
The fashion retailer, which floated in 2017, said a “higher than anticipated level of discounting” during a “challenging” November and December had dented margins.
Quiz said revenues grew 8.4% in the six weeks to January 5, but warned gross margins would slip to around 60.5% for its full-year, compared to 62% a year ago.
As a result, the business now expects to register EBITDA in the region of £8.2m in its 2018/19 financial year.
The latest profit warning comes just three months after Quiz’s last earnings downgrade. In October 2018, it said full-year EBITDA would be approximately £11.5m following lower than expected sales through third parties and the demise of House of Fraser.
Despite the downgrade, Quiz did post increases in both online and store sales during the golden quarter.
Ecommerce revenues surged 34.1%, while the retailer’s standalone stores and concessions registered a 1.6% uplift.
Full-year revenues are expected to come in at £133m, lower than current market expectations.
Quiz said the downgrades were “prudent” given the “continued uncertainty” surrounding consumer demand.
Quiz boss Tarak Ramzan said: “Against the backdrop of challenging trading conditions over recent months, Quiz has delivered further revenue growth over the Christmas period driven by the performance of our own websites.
“However, the growth and the margin achieved have been below our initial expectations and, consequently, the board considers it appropriate to revise its sales and profit expectations for the current year.
“We remain confident about Quiz’s long-term potential as an omnichannel fashion brand with a clear customer focus. Management’s utmost priority remains achieving further growth for the business and improving profitability in the future.”