Quiz expects flat profits | Wall St down on Fed report
Shares in fast fashion chain Quiz Clothing closed 1.25p (11.74%) lower after the company reported challenging trading conditions amidst rising inflation.
The Glasgow-based group said it anticipates profit before tax for the current year will be similar to that generated in the past year because of softer consumer demand and inflationary cost pressures.
Profit before tax for the 12 months to the end of March increased 192% to £2.3 million from £800,000 in the previous year which included disruption from Covid. Revenue rose 17% to £91.7m (£78.4m).
But sales in the three months to the end of June this year fell to £23.2m, representing a 15% decrease on the prior year. This in part reflected the strong prior year comparatives in the first half as well as the impact of the macroeconomic uncertainty and inflationary pressures on consumer demand.
Tarak Ramzan, founder and chief executive, said: “The past year once again demonstrated the benefits of the Group’s omni-channel model as we saw encouraging revenue growth across stores and online.
“We continue to firmly believe that the QUIZ brand has a clear, differentiated position in the market and continues to resonate with a broad age range of customers. The Group continues to focus on achieving its online growth potential through its website and we were encouraged by the increase in sales and active customers during the year.
“The trading environment in the opening months of the new financial year has been tough reflecting the widely publicised external economic factors impacting consumer demand.
“Whilst this challenging backdrop is expected to continue into the second half, the Board remains confident that the Group’s omni-channel business model and differentiated brand will enable the Group’s long-term success and profitable growth.”
New data showed wage rises were still driving up costs across the UK services sector, according to a closely followed index for Bank of England policymakers.
The purchasing managers’ index (PMI) showed that businesses topping up salaries was offsetting declines in fuel and electricity costs.
It could prompt more interest rate hikes to get inflation under control, economists suggested.
The FTSE 100 closed 77.62 points lower, or 1.03%, to 7,442.1.
Wall Street’s main indexes ended with modest declines on Wednesday as investors digested minutes from the US Federal Reserve’s latest meeting and braced for significant economic data in the days to come.
Minutes showed the Fed agreed to hold interest rates steady at the June meeting as a way to buy time and assess whether further rate hikes would be needed.
Following the release of the anticipated minutes, investors still largely expected the central bank to raise rates at its next meeting later this month. Key economic data is due before the meeting, including the monthly US jobs report on Friday.
The Dow Jones Industrial Average fell 0.38%, the S&P 500 lost 0.20% and the Nasdaq Composite dropped 0.18%.
New car registrations in Britain rose for the 11th consecutive month in June, climbing by about 25% from a year earlier, preliminary industry data shows.