- Newly-listed firm warns that sales have been hit by weak consumer sentiment
- Earnings growth set to be ‘modest’ amid investment in new stores and online
- Pre-tax profits grew 4% to £8.4m in the year to February 24
The stock market value of sports retailer Footasylum nearly halved after it warned that annual earnings would be more ‘modest’ in the new financial year.
The retailer laid out plans to invest in new store openings, expand existing stores and make improvements to its website – an outlay that will impact its bottom line next year.
Footasylum also revealed that recent trading had come under pressure as it is not immune to the wider woes on the high street.
Footasylum intends to plough more money into its stores, such as this one in Leeds
Chief executive Clare Nesbitt said: ‘While our core target market of the 16 to 24-year-old consumer has proved to be comparatively resilient in a downturn, our trading since the beginning of the new financial year has undoubtedly been impacted by the widely-documented weak consumer sentiment on the high street.’
The news sent shares in the recently-listed firm sliding 46 per cent – adding to an already dismal day for retail.
This morning, department store chain Debenhams warned over profits for the third time this year.
Chief executive Clare Nesbitt warned that new stores will ramp up property costs and hit the bottom line
The firm’s cautionary sentiment overshadowed an otherwise robust maiden set of annual results since floating on London’s junior AIM market last November, with underlying pre-tax profits up 4 per cent to £8.4million for the year to February 24.
Revenues jumped 33 per cent to £194.8 million, thanks to a 41 per cent jump in online sales, which now account for 30 per cent of total sales.
Footasylum is looking to grow its chain from 65 stores to around 150 in the UK.
The group is also boosting its online offer, with the aim of generating half its total turnover from its website and wholesale channels.
Retail experts at Liberum said: ‘Footasylum remains a high growth business, is investing wisely and the story remains very much intact, though it is clearly disappointing to be cutting numbers.’