Quiz issues fresh profits alert after poor start to year
Quiz: sales slump
Scottish fashion retailer Quiz has warned that it will not meet a profit forecast made on 11 January after a poor start to the year.
The company has continued to increase sales online between 1 January and 28 February with group online revenue increasing by 16.2%.
However, this growth has been offset by an 11.1% decrease in revenue from the group’s UK standalone stores and concessions. Consequently, group revenue fell by 1.7% in the period against the comparable period last year.
Its earlier forecast that sales for 2019 would come in at £133m and profits at £8.2m has been downgraded to sales of £129m and profits of £4.5m.
Tarak Ramzan, chief executive of the 71-store group, said: “This has been a highly disappointing trading period for the group. As a result, the board will be reviewing all aspects of the business over the coming months to ensure that we can deliver the group’s long-term potential despite the changing consumer backdrop and challenging trading conditions.”
Arlene Ewing, Investment Manager at Brewin Dolphin Scotland, said: “What a difference a year has made for Greggs. Around this time in 2018 the Beast from the East hit the UK, which led the company to declare weaker profits and sparked a sell-off from investors. Since then, Greggs’ shares have been on a roll – more or less doubling in value from July 2018.
“In today’s results, sales increased 7.2% and pre-tax profit is up to £82.6 million, with strong cash generation and a special dividend in the offing. There’s a lot to like about Greggs – it’s a publicity machine, recession-proof, and has a knack for adapting to consumer habits. There could be more good news to come after a strong start to 2019, buoyed by the Piers Morgan-maligned vegan sausage roll.”
Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service, said: “Because Greggs is on a roll and in most part thanks to that now famous non-meat sausage roll that has prompted an uplift in sales of both the vegan and the traditional meaty variety. So much so that group total sales topped a billion pounds in 2018.
“They grew 7.2% to £1,029.3 million, the first time in its history that the business has generated turnover of more than a billion pounds in a year.
“Greggs initially launched the vegan sausage roll in 950 stores to cash in on the “Veganuary” trend. Following what it described as an “overwhelming response from the public” and not forgetting the lively social media debate that ensued, it began rolling it out to a further 250 stores a week. It now sells the product in all of its 1,950 outlets.
“The task at hand now is for Greggs to cook up something equally spectacular to whet customers’ appetites and keep momentum going in 2019.”
Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service, said: “Embattled UK estate agent group Countrywide has referred to last year as “one of the most challenging” and after seeing earnings halve and the group plunged into losses you can see why. However, its £215,000 HM Revenue & Customs fine for failing to comply with money laundering prevention rules, imposed this week suggests things may be about to get worse yet.
“Brexit uncertainty is one big external issue, as is the fee on tenant fees, and both will affect Countrywide. But it clearly also still has internal problems to tackle too and we’ll have to see whether investors are convinced that having pressed the “reset” button things really will improve.
“A three year turnaround plan is on the table, but three years is a long time in the estate agency business. Especially so in uncertain times.”