N Brown cites weaker consumer confidence as H1 profits fall

6th Oct 2022 09:43

(Sharecast News) - Clothing retailer N Brown posted a drop in first-half profit and revenue on Thursday, citing weaker consumer confidence.

In the 26 weeks to 27 August, adjusted pre-tax profit slumped 82.4% to £4.3m, with group revenues down 4.6% to £331.5m. The company, which owns Simply Be and Jacamo, said that as the period progressed, weakening consumer confidence led to a more challenging online retail market.

N Brown said it had seen significant volatility in trading trends in the second quarter and into the third, including both before and after the 19th September bank holiday. "This, combined with other macroeconomic conditions, makes visibility on revenue trends difficult."

Based on the assumption that macroeconomic uncertainty and inflationary pressures will continue through the second half, the group now expects H2 product revenue to decline in line with the year-on-year drop seen in the second quarter and September.

Chief executive Steve Johnson said: "In a difficult period of weakening consumer confidence, we've balanced our objectives between disciplined trading - with a focus on upholding margin - and delivering on our long-term strategy to transform the business.

"We anticipate continued softness in trading over the second half as macroeconomic pressures continue to weigh on consumers, despite government support. We will, therefore, maintain our focus on tightly managing both our costs and margins. At the same time, given our ongoing confidence in our strategy and the strength of our balance sheet, we will continue to invest in our digital transformation to deliver sustainable profitable growth."

At 0940 BST, the shares were down 11% at 21.60p.