Scottish fast fashion chain Quiz back in profit but outlook clouded by spending squeeze
Quiz, the Glasgow-headquartered “fast fashion” retailer, has returned to the black thanks to recovering demand for party wear, but warned of a possible negative impact as consumers tighten their belts.
The group posted underlying pre-tax profits of £788,000 for the year to March 31 against losses of £9.6 million the previous year.
Revenues nearly doubled to £78.4 million from £39.7m the year before thanks to the end of Covid restrictions and less lockdown disruption for its stores and concessions.
The firm said turnover for the first three months of the new financial year was 62 per cent higher at £27.3m and back up to levels seen before the pandemic, on a like-for-like basis.
But it cautioned over the “potential for sales later in the year to be impacted by the effect of the inflationary environment and increases in the cost of living on consumer confidence”.
Chief executive Tarak Ramzan said: “Despite the well-documented challenges across the retail sector, we remain encouraged by customer demand for the Quiz brand. Whilst there are significant levels of uncertainty impacting the consumer right now, we are confident that Quiz is well-positioned to continue to deliver against its strategy and drive long-term, sustainable and profitable growth.”
The firm said it had “marginally” raised prices in the face of higher costs of garments and shipments.
It told investors: “The widely reported industry-wide global freight disruption and increased costs have affected, and continue to affect, the group. To date, we have minimised the impact of increased costs on customers arising from additional freight costs by adjusting delivery schedules to ensure that product is available when required.”
Matthew Webb, an analyst at brokerage Panmure Gordon, said: “Quiz’s [full-year] results are slightly ahead of April’s guidance, driven by a better-than-expected gross margin, and recent trading has been positive.
“In our view this performance, and specifically the return of the shops to profitability under their new rental terms, vindicates the strategic decisions to continue with the omnichannel model and focus on its own website and stores.
“Quiz has taken modest price increases to protect its gross margin and we leave our forecasts unchanged.”
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