Shares in fast fashion chain Quiz soared over 40% after the group announced it is on track to post its first profit since 2019
- Quiz stocks posted the biggest gain in the AIM All-Shares Index on Friday
- The company expects full year sales to beat expectations to around £78m
- Party wear sales have been significantly affected by lockdown rules in 2020 and 2021
Clothing retailer Quiz saw its share price soar today after upgrading its full-year guidance to profitability for the first time in three years.
quiz stocks was up 44.2 percent to 15.5 pence late Friday afternoon, making it by far the biggest rise in the AIM All-Shares Index – although they remain well below their peak.
In its latest trade update, the fast fashion chain revealed that the strong trade numbers it experienced over the holiday season across its website, stores and concessions continued into the first three months of 2022.
Partywear: Quiz raised its profit guidance following an improvement in gross margin caused by the group’s decision to sell more full-price casual and smart casual wear
This helped boost like-for-like earnings to a level “broadly consistent” with what the company was generating prior to the Covid-19 pandemic.
As a result, the Glasgow-based company now forecast total revenues to beat expectations to around £78m.
It is also estimated to post an annual pre-tax profit of at least £500,000, which would be its first profit since 2019, after posting losses of £3m and £10m respectively in the previous two years.
Quiz attributed its increase in earnings to an improvement in gross margin caused by selling more full-price casual wear and smart casual wear as popularity recovered from foreign holidays and weddings.
Party wear sales have been severely impacted over the past two years by lockdown restrictions limiting the size of wedding ceremonies and gatherings of Brits living in different homes.
Demand rebounded significantly as those laws were relaxed, with revenue more than doubling for the first half of the fiscal year and the two months that followed from the corresponding period in 2020.
Note: Glasgow-based Quiz estimates it will post annual pre-tax profits of at least £500,000 and revenue of around £78m for FY2022
But as the group reported in early January, its trading took a hit during the festive period after certain third-party partnerships ended, causing online revenues to plummet 25 percent in December.
Orders were also severely impacted this month by the emergence of the Omicron variant of the coronavirus and the UK government’s subsequent imposition of ‘Plan B’ restrictions.
More quiz shoppers brought their purchases back to the company’s stores as many office Christmas parties were cancelled, new rules on entry to major public venues were imposed and Britons were advised to work from home.
Nonetheless, in December the company saw its sales rise 20 per cent to £8.8m and sales have continued to grow even as other issues such as rising energy prices have surfaced.
“Encouraged by the positive performance achieved during the year, which underscores the strength and recognition of the Quiz brand and growing consumer demand for its proprietary range of formal and formal wear, the Board is confident that the Group will continue to deliver profitable sales growth” , noted the retailer .
Founded in 1993 by Tarak Ramzan, Quiz has become known in recent years for its collaborations with major reality TV stars from shows such as Love Island, The Only Way is Essex and Geordie Shore.
According to its website, the company started with three stores in Scotland before having since expanded to over 150 stores and concessions across the UK and more than 60 franchises in Asia and Europe.
It raised more than £100m when it debuted on the London Stock Exchange in 2017 with a share price of 161p, but the value of its shares began to fall the following year when it issued the first of a series of profit warnings.
Shares in fast fashion chain Quiz soar over 40%
Source link Shares in fast fashion chain Quiz soar over 40%