Footasylum expects full year EBITDA to be at lower end of analysts' expectations
Footasylum increased its total revenue by 14% to £102.3 million in the 18 weeks to 29 December but has warned that it expects full year EBITDA to be at the lower end of analysts’ forecasts.
Online sales were up 28% to £36 million in the period and have accounted for 33% of total revenue in the year to date. Wholesale revenue doubled from £1.3 million to £2.6 million.
Meanwhile, in-store revenue rose by 5% to £63.7 million despite Footasylum suffering delays in delivering planned upsizes and new stores. The retailer opened five new stores and upsized three prior to Christmas which means it now operates 70 stores in the UK.
Barry Bown, executive chairman of Footasylum, said: "In the context of the current tough conditions on the high street, we are encouraged to have delivered revenue growth across all of our channels and major product categories, with online and wholesale continuing to perform particularly well. We have also been pleased by the performance of the five new store openings and three upsizes that we completed in time for Christmas."
Footasylum said it continued to face challenging trading conditions throughout the Christmas trading period which led it to embark on more promotional and clearance activity than originally expected. As a result, gross margin was below forecast for the period.
The retailer is also reducing costs across the business which it said might result in some exceptional costs. It now expects to report an adjusted EBITDA for the full year towards the lower end of analysts' forecasts.
Bown added: "The short-term outlook is undeniably challenging, and we continue to maintain our focus on cash, working capital and inventory management, as well as reducing costs across our operations. The current trading conditions have led to significant discounting and promotional activity across the sector, and this in turn has impacted our gross margin expectations for FY19."
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