SuperGroup chief executive Julian Dunkerton has promised continued growth after a stellar third quarter, and said the retailer’s phenomenal share price rise since last year’s IPO reflected that the company is delivering on its promises so far.
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The retailer, owner of the ultra-trendy Superdry brand, generated retail sales growth of 91.8% to £61.4m in the quarter to January 30. In the nine months to that date the rise was 81.7% to £115.8m and total group sales rose 74.7% to £172m.
Dunkerton said SuperGroup continued to motor on all levels. “The product has got better, the retail environment has got better, the stores have grown and the internet has been stratospheric.”
Since its flotation last year, SuperGroup has been a darling of the City and its shares have rocketed, with the exception of a shock fall at the time of the interim results on margin concerns. In the last three months alone the shares have risen by 25%.
Dunkerton said the upwards movement reflected City confidence in SuperGroup’s ability to make good on its promises. He said: “We do what we say we’ll do. We offer an opportunity that is fairly unique. Our sales growth, and our profits, is among the highest of any sort of company.”
Broker Singer increased its price target from 1480p to 1625p and said: “This reflects our increased confidence that the business is gaining traction, both in terms of brand awareness and earnings momentum.”
Altium noted: “Everything remains on track and, despite the fact that the shares have fully recovered from the debacle that was the interim results, we still believe they are good value.”
Last week SuperGroup took a big step towards realising international growth ambitions with the acquisition of continental franchise partner CNC Collections.
The euro purchase of CNC, which runs shops in Belgium, France, Luxembourg and the Netherlands, is expected to make possible a faster roll-out of franchised shops and the opening of company-owned larger stores in key European trading locations.
CNC’s existing management, led by Luc Clement, who will become SuperGroup’s head of European franchising, will remain after the deal and its continued involvement is seen as a crucial benefit of the deal.
Dunkerton said the acquisition of CNC was “a major step forward in our European growth strategy”. He expects CNC’s sales to exceed e40m (£34m) and profits to rise by e8m (£6.8m) in the first 12 months of full ownership by SuperGroup.