(Reuters) - Shares in suit retailer Moss Bros Group Plc (MOSB.L) lost almost a third of their value on Friday as the company warned its full-year profit would take a substantial hit after hot weather and the World Cup kept shoppers away from stores.
The chain is the latest UK retailer to blame this summer’s heatwave and the soccer World Cup for disappointing performance.
“Menswear was specifically impacted negatively by the combination and longevity of these two external factors,” Moss Bros’ Chief Executive Brian Brick said, adding that the number of people shopping on the high street had dropped dramatically.
Like-for-like sales slid 6.9 percent in the first half ended July 28, the company said in its half-yearly report. Hire sales of clothing for special occasions, which accounted for around 12 percent of business, fell 7.8 percent.
Moss Bros shares slid 29 percent to seven-year lows in early trade, wiping around 13.5 million pounds off the company’s market capitalisation. They recovered slightly to stand 13 percent lower at 40.40 pence by 0825 GMT.
“The company had endured a tough first quarter of its own making as it faced a shortage of stock due to supply issues,” said analysts at AJ Bell.
“If the weather and World Cup are truly to blame for the recent rough patch then investors will expect to see a distinct improvement in performance when the company next updates the market.”
Moss Bros, which dates back to 1851, now expects to report a full-year operating profit “materially below” analysts’ expectations of 2.3 million pounds.
Brokerage Peel Hunt on Friday cut its forecast for Moss Bros’ full-year profit before tax by 1.8 million pounds to 0.5 million pounds, with similar downgrades to future years.
After years of mounting strain, Britain’s clothing sector has been upended in 2018 with giants such as Marks & Spencer (MKS.L) and House of Fraser forced to shut stores as consumers shop online for cheaper goods.
Supermarkets, pubs and restaurants benefited from record temperatures in June and July and England’s run to the last four in the World Cup, but clothing sales suffered as consumers spent less time shopping and delayed buying autumn ranges.
Online retailers like Boohoo Group Plc (BOOH.L) and ASOS Plc (ASOS.L) have bucked a tough market, outflanking and taking market share from traditional rivals burdened with the costs of big brick-and-mortar store networks.
But even they have been burned by unusually hot temperatures and Zalando (ZALG.DE), Europe’s biggest online only fashion retailer, this week cut its 2018 outlook for the second time in as many months.
Moss Bros, which has more than 100 stores across Britain as well as an online operation, had already warned in March that a tough retail environment and significant stock shortages had hit trading and profit.
In May, however, the suit retailer painted a cheerier picture and said it was recovering from the challenges it had faced at the start of the year.
Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Patrick Graham and Kirsten Donovan