Trendy clothing group Supergroup has been growing so fast it has not been able to accurately predict the amount of money it expects to make, resulting in the group issuing a severe profits warning.
The group expects profit before tax for the year to end-April to be in the region of £43m, versus the current consensus forecast of £50.74m.
The group, which has developed a reputation in the City for being accident prone, said there have been arithmetic errors in its forecast of the wholesale business's performance amounting to a shortfall of some £2.5m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
On top of that, the pell-mell growth of the group and its relative short trading history has made it difficult to accurately predict demand, and the group has admitted to a timing issue on the pull-down of stock over the year-end, which will put a £2m dent in profits.
The statement stressed that as this was strictly a timing issue, the "lost" £2m would turn up in the following year's profit and loss account instead.
The bad news does not end there. Retail sales are in line with expectations, but the mix of sales through its various channels has had an impact on margins.
Additionally, the group took the decision to increase its operating costs in order to ensure that it had the correct product at the right time in each of our retail channels, and also, to accelerate investment in its management team. "We anticipate the impact of these factors to be some £2.0m in total," the group said.
Lloyds, Halifax and Bank of Scotland to shut another 45 branches
Lloyds Banking Group, which includes Halifax and Bank of Scotland, is set to close a further 45 branches in 2024 - find out if a branch near you is closing.
By Vaishali Varu Published
US stock trading app Robinhood launches in the UK
The low-cost trading platform has opened another waiting list for British investors - following two failed attempts to launch in this country - and is hoping to be fully operational next year.
By Ruth Emery Published