FTSE 250: Superdry shares crash after warning, possible stock dilution

[MongiIG]

FTSE 250-listed clothing retailer Superdry has had more bad news for investors today which has resulted in its stock closing in on the Covid lows.

 Jeremy Naylor | Analyst, London | Publication date: Friday 14 April 2023 

While it said retail sales continue to show good like-for-like growth, they are being registered at a slower rate than anticipated.

Given the challenging trading environment, the Board has taken the decision to withdraw the existing profit guidance of 'broadly breakeven' for FY23.

There are now capital raise options being considered, including a potential equity raise up to 20%, fully supported by Julian Dunkerton, founder and CEO.

Superdry shares crash

The London-listed clothing retailer Superdry has seen its shares crash today as a result of news headlines which really disappointed traders and investors.

This morning retail sales continue to show good like-for-like growth, albeit at a slower rate than we saw last year and indeed less than had been expected.

Share price chart

Let's take a look at the share price chart. Just a quick run through of what all this means is that we're not now at record lows. That was as a result of the Covid low that we saw all the way back in March 2020 when the stock was down at 60.7 pence.

But during Covid, when it went big online, you can see this stock rose to the post Covid highs at 492 pence. Here we are now at 87.5 pence. We are down below the recent line of support. We're down 17.6% at the moment.

The full-year (FY) 2023 revenue is now expected in the range of between £650 to £635 million last year. It was £609 million.

The company says given the challenging trading environment, the board has taken the decision to withdraw the existing profit guidance and broadly break even for fiscal 2023. Now, this was enough to take the stock down.

Then came the announcement that there was a capital raise being suggested including potential equity raise for up to 20% fully supported by Julian Duncan, the founder and chief executive.

But all this added up to a very poor start on the trading day today for Superdry, which is continuing to find the going tough