LONDON (ShareCast) - (Sharecast News) - Quiz said on Wednesday that it is on course to deliver market expectations for the full year despite "an uncertain trading environment", as it announced a £400,000 hit from the collapse of House of Fraser.
In a trading statement ahead of its annual general meeting, the company, which operated 11 House of Fraser concessions and sold its products via the HoF website, said it expects to provide £400,000 in the six months to 30 September in relation to outstanding debtor balances and other potential costs.

On the bright side, Quiz said its UK stores and concessions have performed well in the year to date despite the previously reported softening of footfall in April. It has opened two new standalone stores at Bluewater shopping centre in Kent and Oxford, which have performed "encouragingly", and continues to review opportunities for further expansion.

Meanwhile, the international business has continued to grow and develop in line with the group's expectations.

"Despite an uncertain trading environment, we believe that the group, underpinned by the strength of the Quiz brand as well as its flexible, omni-channel model, remains well positioned for continued strong growth. At this stage, and with important trading periods in the second half of the financial year still to come, the board remains confident that Quiz is on track to deliver market expectations for the full year."

Quiz said it was particularly pleased with the positive customer response to its range over the summer and continues to focus on maximising the brand's online potential by investing in its websites and apps. It added that it is now generating stronger growth through its own website than third-party websites.

Peel Hunt, which rates the stock at 'buy', said the market will probably shake off the HoF provision.

"We won't change forecasts today but there is certainly plenty of good cheer here and it's possible that we could ease numbers up at the pre-close if the autumn/winder season starts well. The shares trade on 17x price-to-earnings, and with strong growth already in numbers, and forecast momentum possibly emerging here, they look very much worth buying."

Edison Investment Research analyst Paul Hickman pointed out that Quiz is to some extent protected from the weak consumer economy because its customers are mostly 16-30 year old singles without families to support.

"The fact that management indicates that it expects to deliver market expectations for the year (£12.1m pre-tax) is good news in view of the fact that it also says it's having to provide £0.4m on the 11 House of Fraser concessions. That implies that the hit is being made up elsewhere," said Hickman.

"Quiz's multi-channel format is clearly a strength and investment in its online channel is timely, with better growth from its own websites compared with third-party websites partners such as Next and Zalando which had high growth last year."

At 0906 BST, the shares were down 0.5% to 166.67p.

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