Made today warned that full-year sales may be lower than last year, as trading remains volatile in an uncertain market, while it could report losses of up to £35m. The online furniture retailer says its sales in the first quarter of its financial year were 10% down on last year, but 64% ahead of the same period in pre-pandemic 2019. That reflects the wider shift online that Made sees taking place in its market.
Made says it is trading ahead of the wider online furniture market, citing third-party data suggesting the market is between 30% and 40% down on last year. But it warns that “trading has been volatile in recent months and more challenging than anticipated at the start of the year”.
It now predicts gross sales will be between flat and 15% lower than last year, that net revenue will be between 8% up on last year and 7% down, and that it will report a loss at the bottom line. Adjusted earnings before tax, one-off costs and asset write downs (EBITDA) are expected to come in at between -£35m and -£15m, including £5m in exceptional costs related to supply chain disruption. Its planned capital expenditure, including the recently-announced acquisition of Trouva, is expected to come in at between £13m and £18m in the current financial year.
Made says it expects to perform ahead of the market, but that the market will be “highly challenging” for the rest of this year. It says that spot freight rates are getting back to more normal levels, but because it expects lower sales, the benefit of reducing shipping costs is likely to be felt later in 2022 than previous expected. Profit margins are expected to be around pre-pandemic levels. It is putting off its ambition of £1.2bn in annual gross sales to beyond 2025.
Made points to successes in reducing the time it takes to deliver orders. Over the last two months, average lead times have met its target of between three and four weeks. Made says that customers are reacting positively to the improvement – seen both through better feedback and through rising repeat orders. Almost half (47%) of orders were repeat orders in the first quarter of 2022, up from 43% a year earlier.
Nicola Thompson, Made chief executive, says: “There is no escaping the tough trading environment at the moment. However, we are laser-focused on executing our strategy and we are delivering strong progress across each of our strategic pillars. Our customers are at the heart of our business and we’re seeing a really positive reaction to our improved proposition, with average lead times consistently at the targeted three to four weeks average for the last two months. Made continues to outperform the online furniture and home market and I am confident the company will emerge in a very strong position.”
Made also announced that it has hired a new chief financial officer. Patrick Lewis, previously chief financial officer at the John Lewis Partnership and a non-executive director at Ocado Group, will join in late June. He replaces Adrian Evans, who joined Made in 2017.
Made is a Top250 retailer in RXUK Top500 research. It sells online in eight European markets including the UK and through seven shops including two flagship showrooms in London and Paris.