SuperGroup 'on track' as sales rise

Shares in SuperGroup, the owner of Superdry and Cult clothing, rose more than 6pc after the fashion retailer reported a rise in Christmas sales.

SuperGroup reported a slowing of like-for-like sales in the 13 weeks to January 26, but investors took heart from the retailer improving its margins as it avoided following rivals such as Debenhams by slashing its prices.

The retailer said that like-for-like sales rose by 1.3pc in the quarter, compared to 4.7pc for the 39 weeks to January 26.

However, SuperGroup said that that sales growth was dragged down by the retailer selling discounted goods on eBay in 2012. When the impact of eBay sales is stripped out, like-for-like sales grew 4.9pc in the period.

SuperGroup also reported a 41pc rise in wholesale revenues, which includes deals to sell Superdry clothing through department stores.

Julian Dunkerton, chief executive, said: ''I am pleased that our on-going strong sales growth and improved margins mean the business remains on track to deliver profit in line with market expectations.

"All infrastructure projects are running to plan - in particular the new distribution centre is already playing a significant role in the delivery of spring/summer products."

Kate Calvert, analyst at Investec, said: "We see material potential to stretch the brand into new areas as well as grow the brand online and internationally where it is still early days in the roll-out story."

Freddie George at Cantor Fitzgerald added:" Earnings have picked up momentum following a strengthening of management.

"The company has spruced up and improved its ranges, which are helping to drive wholesale sales, particularly in Europe, and womenswear now has real momentum.

"There is also a great opportunity to drive international sales boosted by the announcement of several deals, including the acquisition of its German agency business for £3.5m and the link-ups in Turkey and SE Asia.

"We believe the next step may be the acquisition of the US license. The recent appointment of H Schmidt, the MD of International and Wholesale, as from the beginning of May endorses the international strategy. In addition, the company will continue to drive internet sales, which grew by 29pc [of full price sales] in the first half."