Oct 9 (Reuters) — British plus-size clothing retailer N Brown Group Plc cut its full-year profit forecast just three weeks after saying it was on track to meet its guidance, sending its shares tumbling 13.5 percent to their lowest in two years.
The company, which targets older and plus-sized shoppers with brands such as JD Williams, Simply Be and Jacamo, said it saw weak sales at the beginning of the second half due to an unseasonably warm start to the autumn/winter season.
N Brown said it now expected a pretax profit in the range of 88 million pounds ($142.2 million) to 92 million pounds for the year ending March 2015.
Analysts on average were expecting a pretax profit of 103.4 million pounds on revenue of 870.7 million pounds for the year, according to Thomson Reuters I/B/E/S.
“We expect the market to be shocked at the speed of the apparent turnaround at N Brown and other company guidance will undoubtedly be questioned,” Jefferies analyst Joe Spooner said in a note.
N Brown makes nearly half its its sales during the autumn/winter season.
“It’s the value of the sales that have come down,” Chief Executive Angela Spindler told Reuters.
Spindler said people were not buying into things like coats and heavy knitwear that typically triggers an increase in spending in the fashion market as they move into the autumn/winter season.
The Manchester, northern England-based company is being revamped by Spindler, who succeeded Alan White as CEO last year.
She has reduced N Brown’s range of low-margin electrical items, introduced a cash payment option for customers, changed the phasing of marketing spend and relaunched its biggest brand JD Williams.
“While we believe management’s strategy is right for the business long term, arguably management has been too ambitious in its change programme, anticipated customer response and execution has been poor,” Investec analyst Kate Calvert wrote in a note.
N Brown is also expanding its business by opening a small number of click-and-collect stores in major British shopping districts, growing online sales and moving into the United States.
Like-for-like sales were down 0.5 percent, while pretax profit declined 3.2 percent to 42.7 million pounds for the 26 weeks to ended Aug. 30, the company said.
The company maintained its interim dividend of 5.67 pence per share.
N Brown shares were down 13.3 percent at 302 pence at 0912 GMT. The stock was among the top percentage losers on the London Stock Exchange on Thursday morning. ($1 = 0.6189 British pound)