On the back of an announcement of a downward adjustment to its previously advised pre-tax profit forecast, the share price of Studio Retail was down by 40 per cent this morning (31 Jan 22). The business is now expecting its adjusted pre-tax profit to be in the range of £28m-£30m for the current financial year which ends in March, as opposed to its original forecast of £42m-£45m. It had already adjusted its forecast to £345m-£40m ahead of peak trading.
The problems at the online retail business stem from supply chain issues which led to delays in its receiving ordered stock for peak season, along with its requirement to commit to future stock earlier than usual in order to be certain of it landing on time. The same issues are affecting known to be other businesses that are having to agree new working capital facilities.
Paul Kendrick, CEO, Studio Retail said: “The fundamentals of Studio’s business model are solid, notwithstanding the market challenges that have been exacerbated by our over-commitment in the near term. The trading performance over Christmas, with sales up 18 per cent over two years, shows our offer is resonating with a customer base of 2.3 million. We will continue to drive the long-term profitability and success of the group.”
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