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* Currency gains help to boost revenues
* Shares slip as analysts focus on declining margins
* Clothing sector also faces pressure from rising inflation
LONDON, May 11 SuperGroup, the British
company behind the Superdry fashion brand, reported a 27 percent
rise in annual revenue and said it would meet profit forecasts,
helped by its overseas expansion and a weaker pound.
The firm, whose trademark jackets, hooded tops and jogging
bottoms are popular with teenagers and twenty-somethings, said
on Thursday currency changes accounted for about one third of
the revenue growth in both its retail and wholesale operations.
Shares in the company, which have increased 31 percent over
the last year, fell almost 7 percent on Thursday on the lack of
a profit upgrade and declining margins. There are also broader
concerns about the UK clothing sector as disposable income is
squeezed by rising inflation.
"Strong top line growth across retail and wholesale is
offset by gross margins that are lower than expected and revenue
growth has benefited materially from forex," said Liberum
analyst Adam Tomlinson, who downgraded his recommendation to
"hold" from "buy".
The pound has fallen about 12 percent against the U.S.
dollar since Britain's vote to leave the European Union last
SuperGroup benefits from that decline because over half of
its revenue is generated outside the UK. On the other hand, it
does face higher sourcing costs as about half of the goods it
imports are paid for in dollars.
It operates in 62 countries, including the U.S. and China,
through 863 stores and concessions. It also has an e-commerce
business with 27 international websites.
Revenue increased to 750.6 million pounds ($971.1 million)
in the year to April 29. Retail sales rose 20.6 percent, while
wholesale revenue jumped 42.9 percent, with the firm also
benefiting from better product ranges, the introduction of new
categories and improved infrastructure.
However, gross margin was forecast to fall on a full year
basis by 120 to 140 basis points, reflecting the impact of
higher sourcing costs and the strength of wholesale, which has a
lower margin than retail.
The group forecast a 2016-17 underling pretax profit of
86-87 million pounds, in line with analysts' forecasts and up
from the 73.5 million pounds made in 2015-16.
"We remain confident in the continued delivery of
sustainable revenue and profit growth," said Chief Executive
The stock was down 112 pence at 1,539 pence at 0845 GMT,
valuing the business at 1.25 billion pounds.
($1 = 0.7729 pounds)
(Reporting by James Davey; editing by Keith Weir)