As a raft of half year results pile in, retailers are showing signs that, while H1 2022 saw gains, the latter part of the period has started to point to 2023 being more challenging. Here we round-up the latest results out today.
Quiz: better than expected sales for H1
Omnichannel fast fashion retailer Quiz has posted better than expected results for the six months to the end of September. Group revenues at the company rose 37% to £49.4m, reflecting a bounce-back in demand following the lean years of the pandemic. Gross margin at the retailer also rose by a staggering 61.6%, bringing it back to H1 2020 levels.
Online revenues for the retailer rose 29% to £16.1m, driven predominantly by sales through Quiz’s own website, where active users rose 14% between March and September this year thanks to increasing digital marketing.
UK store and concession revenues increased 48% to £24.6m, with demand at pre-pandemic levels on a like for like basis.
Sales for the two months to 30 November 2022, including the Black Friday sales period, totalled £16.0m (2022: £16.2m) and were broadly in-line with management expectations with demand in recent weeks helping to offset weaker than anticipated revenues in October
Notwithstanding, the recent volatility in demand and that Quiz’s Christmas trading and January sales periods are still to come, the company continues to anticipate delivering a full year outcome at least in line with market expectations, it says.
Tarak Ramzan, Founder and Chief Executive Officer, comments: “The Quiz brand has performed well in the first half of the year, with strong year on year sales growth of 37% supporting increased profitability and a strong cash position. Active customers increased 14%, reflecting the appeal of our differentiated and value brand.
“Whilst we will not be immune to the widely publicised cost of living pressures on the consumer in the second half of the year, I remain confident that supported by our omni-channel model, fantastic brand and unique occasion wear offering, Quiz is positioned well for long-term, sustainable and profitable growth.”
Naked Wines: pivots to profit
Naked Wines plans to reshape its business have started to see a return, with the vintner managing to scrape £1.3m profit on total sales of £166m – 4% up on the previous half. The company, however, is looking at a £0.2m loss in the 2023.
Nick Devlin, Group Chief Executive, explains: “We announced in October our decisive plans to deliver profitability through reshaping our strategy. In the half we took the first steps to reduce our costs and drive improvements to our liquidity, profitability and unit economics in the near-term. Ultimately, we are laying the foundation for a return to our ambition of sustained, profitable growth, whilst also providing ourselves with greater resilience.”
He continues: “As expected, in the short-term the changes we have undertaken have reduced our sales trajectory, though the full impact of this will be seen in the coming periods. However, the strength of our business model is clearly visible through underlying retention rates that remain unchanged to pre-pandemic levels, our success in realising price uplifts and improving payback levels. We are at the peak in our inventory cycle and, with our destocking plan, we expect to generate cash in FY24 whilst protecting our winemakers as well as our Angel members. Currently, we are trading profitably in line with our expectations over the key holiday quarter and reconfirm our revised guidance for FY23 shared in October.”
Moonpig: adjusting for postal strike
Meanwhile, online greetings cards-to-gifts platform Moonpig has downgraded its profits forecast after its half year sales dropped following Royal Mail Strike action.
Results for the first half ended 31 October saw revenues flat at £142.8m. Reported pre-tax profit halved to £9.1m after a jump in finance costs following the acquisition of Red Letter Days owner Buyagift.
This, combined with on-going industrial action by Royal Mail has seen the company downgrade revenues for the year to April 2023 to £320m from a previously forecast £350m. The news saw the company’s share price drop 17.6%.
However, CEO Nickyl Raithatha remains bullish, insisting that as the “clear online leader in greetings cards, Moonpig is positioned to benefit as the market continues the long-term structural shift to online”.
He adds: “Our resilient business model offers a powerful and unique combination of leading market positions, strong customer retention, high profitability and robust cash generation, giving us flexibility to manage through the economic cycle. As a result, our expectations for profit for the current financial year remain unchanged.”