An improvement in recent trading at SuperGroup, owner of the Superdry brand, reassured the City that the business still has legs.
The retailer, which floated last year and became a share price sensation, had lost some of its lustre for investors after the pace of growth appeared to slow. However, soaring profits and improved retail sales put the retailer back in favour.
SuperGroup generated a 110% increase in pre-tax profits to £47.3m in the year to May 1, when sales climbed 71% to £237.9m.
Although some observers have questioned the longevity of the Superdry brand, SuperGroup founder and chief executive Julian Dunkerton was confident about prospects. He said in the first 10 weeks of the new financial year retail sales rose 48% and group revenues were ahead 56% year-on-year.
UK store openings were “on track” and 20 are planned for this year, of which three have opened and legal commitments made on another 10.
SuperGroup expects to open its Regent Street flagship, in the premises occupied at present by Austin Reed, towards the end of this financial year.
International expansion is being accelerated and 44 overseas franchised and licensed shops opened last year. Dunkerton said:”We have had a successful year, delivering strong financial results and have made significant progress across a number of key areas.
“Our international franchise operation goes from strength to strength and following our acquisition of SuperGroup Europe BVBA in February, we are accelerating our European roll-out. We remain confident in our strategy and in the ongoing potential for the Superdry brand, both at home and internationally.”
Peel Hunt analyst John Stevenson believed that SuperGroup looked “significantly oversold, particularly given accelerating performance overseas and online”.
He said: “We view this as a solid performance, given recent weeks have seen warm weather and markdowns across the high street, two factors that have not favoured SuperGroup historically.
“While sceptics will still point to UK like-for-like sales being subdued, the pick-up in trading is hardly consistent with a brand in collapse.”
Arden analyst Nick Bubb said: “SuperGroup has reported a strong pick-up in current trading, showing Superdry is alive and kicking.”
Singer analyst Mark Photiades said SuperGroup’s results had some in “a touch ahead” of his expectations: “Current trading shows retail has shown an encouraging pick-up and wholesale growth is strong.”