Quiz shares in freefall as retailer issues second profit warning of the year
Fashion retailer Quiz saw its share price nosedive this morning after issuing its second profit warning of the year.
Shares in the clothes brand plummeted more than 40 per cent in early trading after it revised its full-year revenue forecast to £129m, down from the £133m estimate posted in January.
Read more: Quiz shares tumble on second profit warning
The Scottish firm also slashed its forecast for earnings before interest, tax, depreciation and amortisation from £8.2m to £4.5m after suffering a “significant shortfall” in sales in the fourth quarter.
Quiz said its online revenue had increased 16.2 per cent over the first two months of the year. But this was offset by an 11.1 per cent fall in revenues from its standalone stores and concessions as high street woes continue to impact brick-and-mortar retailers.
In addition to the declining sales, the retailer said it had to apply higher-than-expected discounts to clear excess stock.
In an update this morning Quiz said the board is launching a thorough review of all aspects of the business in a bid to combat tough trading conditions.
Chief executive Tarak Ramzan said: “Whilst the board remains confident in the strength and appeal of the Quiz brand, as demonstrated by our continued sales growth online, this has been a highly disappointing trading period for the group.
“As a result, the board will be reviewing all aspects of the business over the coming months to ensure that we can deliver the group's long-term potential despite the changing consumer backdrop and challenging trading conditions.”
The update comes just two months after Quiz warned its Christmas sales had fallen short of expectations. The company said it expects to publish the findings from its review with its full-year results in June.
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Paul Hickman, analyst at Edison Investment Research, said: “Management has done much to integrate the store estate with its online offering and its significant social media presence.
“However, today’s warning shows that, in the end, those actions have been insufficient to protect the physical offer above the market’s pervasive shift away from physical retailing.”