Superdry PLC (LON: SDRY) ended more than 15% down today after reiterating plans of raising equity capital to improve its balance sheet.
Superdry stock down on withdrawn outlook
On Friday, the clothing brand said it wanted to issue new equity for up to 20% of its share capital. Superdry also confirmed that the said equity raise will be backed by its Founder and Chief Executive Julian Dunkerton.
My belief in the Superdry brand is stronger than ever. I’m confident that we have the right plan and the business will emerge from the current turbulence stronger than ever.
Analysts at Jefferies expressed disappointment in today’s announcement. Superdry stock is down also because it withdrew its previous guidance for “broadly breakeven” profit this year.
Versus its year-to-date high, this U.K. stock is down about 45%.
Superdry PLC has identified cost savings
Superdry PLC now forecasts £615 million to £635 million in revenue for 2023 as the cost-of-living crisis push consumers into limiting non-essential expense, as per the trading update. CEO Dunkerton added:
There’s no doubt that market conditions are challenging, compounded by issues we have previously disclosed and are working to address in wholesale. We need to ensure our business is in right shape to navigate these difficult times.
To that end, he added, Superdry has identified £35 million worth of cost savings that could materially boost its underlying profitability. The London-listed firm expects those savings to realise by the end of FY24.
Wall Street currently has a consensus “hold” rating on Superdry stock.
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