‘Worse than expected’ results and another profit warning sent struggling Superdry (SDRY) stocks tumbling by more than 32% today. The fashion firm, which has seen its shares crash 81% across the year, came clean today about a massive 49% decline in half-year profits, as well as poor store sales and deteriorating margins. It also warned that its earnings for the full-year will fall short of the mark. The half-year numbers were worse than analysts predicted and triggered a sharp sell off, taking the firm’s share price to below £3.74, lows not seen since 2012. AJ Bell investment director Russ Mould said: ‘Expectations were already low for Superdry given mild weather having a negative impact on coats and jackets. ‘However, its half year results are even worse than expected, prompting questions as to whether the business has really lost its way.’
Dixons Carphone (DC.), the retailer behind Curry’s PC World and Carphone Warehouse, saw shares tumble 10% in early trading after it reported an eye-watering but expected £440million half-year loss. The troubled company, which confessed to a major data breach earlier this year, had previously warned that a near £500million writedown on the value of its struggling mobile phones division would weigh on its bottom line during the period. With those costs stripped out earnings sunk by a third to £50million but, in a touch of better news for the firm, sales rose by 2%, and 4% in the most recent quarter. The retailer said it made good progress in its electricals category and hailed market share gains, but its mobile phones arm remains the bugbear. Sales were down 4% at the loss-making division as consumers hold on to handsets for longer or opt for sim-only contracts. Alongside the half-year results, Dixons Carphone’s new boss Alex Baldock, who joined from Shop Direct earlier this year, lifted the lid on a strategy aimed at reviving the firm’s fortunes.
Sainsbury’s and Asda are challenging the competition watchdog in court over being granted more time for the probe into their £12billion mega-merger to be carried out. The two ‘big four’ supermarkets are applying for a judicial review, arguing the ‘unprecedented scale and complexity’ of their planned union warrants special treatment from the watchdog, the CMA. But the CMA has said it will defend its position in court, and is ‘not willing to compromise on the thoroughness or objectivity’ of the investigation. The application requesting a review of the CMA’s timetable and process has been lodged with the Competition Appeal Tribunal today (Wednesday). Sainsbury (J) (SBRY) and Asda said they have asked the CMA for an additional 11 working days over the Christmas period to respond to a large amount of material which has recently been provided to them.
Marks & Spencer Group (MKS) has hired former Sainsbury’s boss Justin King ahead of what is set to be a make or break Christmas on the High Street. King, 57, ran Sainsbury’s from 2004 to 2014 and is credited with breathing life back into Britain’s second largest supermarket. His appointment as a non-executive director at M&S comes as the retailer battles to revive sales and profits, which have been dented by fierce competition from online rivals and discount supermarkets Aldi and Lidl.
WPP (WPP) shares surged after it unveiled steep job cuts, adding nearly £7million to the fortune of ousted founder Sir Martin Sorrell. The marketing conglomerate is to axe 3,500 jobs and shut or merge almost 200 offices in a battle to cut costs. It is part of a strategy unveiled by chief executive Mark Read, who replaced Sorrell after the 73-year-old was forced out earlier this year amid claims he paid for a Mayfair prostitute on company expenses, allegations he denies.
Online retailer Mysale Group (MYSL) saw more than half of its value wiped off today after it warned it will make a loss in the first half of its financial year due to changes to tax sales regulation in Australia, its largest market. Mysale – which operates flash-sales websites selling clothes, beauty and homeware products also in the UK, New Zealand and South East Asia – said it expects to make an underlying loss in the first half to December. It also warned sales and profits would come in ‘significantly below’ market expectations for the full-year to the end of June 2019. Shares in MySale fell by over 53% to 16p in morning trading.
Barclays (BARC) has become the first major UK bank to allow profligate customers to block certain kinds of debit card spending. The bank is aiming to help vulnerable spenders to avoid blowing their wages on things they do not need amid fears over surging household debt. Customers will be able to block spending or allow spending on five different categories including groceries and supermarkets; restaurants, takeaways, pubs and bars; petrol stations; gambling; and premium rate websites and phone lines such as for TV voting, competitions and pornography.
Speculators have made an estimated £68million betting against Interserve (IRV) so far this year. Hedge funds and other short-sellers likely made almost £2million alone on Monday when the struggling government contractor’s share price plunged 53% after it announced plans for its second bailout in nine months, calculations from IHS Markit reveal. The rout has sparked fears that the company, which works in schools, the NHS, prisons and other state sectors, could become ‘Carillion mark two’ and collapse like its larger rival.
Carpetright (CPR) shares, which have been in the doldrums since the firm unveiled a radical store closure plan last April, spiked by more than 9 per cent in early trading today. The minor rebound came as the flooring stalwart revealed hefty losses relating to the closure of 65 shops, but reassured investors with signs of green shoots. Carpetright racked up losses of £11.7 million in the six months to the end of October, compared with a small profit a year ago, while sales declined 15.7% to £191million.
