French Connection shares dip 26 percent after profit warning
French Connection revealed earlier this month that revealing its retail sales will be significantly lower than expected, sending its stock to 39 pence each (-26 percent).
The fashion chain, had previously forecast a 500,000 pounds profit for the coming year but it came in as the expected 3.5 million pounds loss. It is noteworthy that the British retailer, which has reported a full year loss for the past three years, had hoped to make a profit this time.
“The first-half retail sales performance is now forecast to be materially lower than expected … The financial performance for the year is now expected to be below the current market expectations,” summed up the company in a note.
New fashion ranges are not working that well
The anticipated new ranges at the fashion brand were not enough to reverse the fate of this year’s results, as the retailer revealed a full-year pre-tax loss of 800,000 pounds in March.
“We also believe that there has been a step back in the quality and depth of the ranges in the stores,” said in this regard Freddie George at Cantor Fitzgerald.
On the wake of the news, French Connection Group (LON:FCCN)‘s stock had its ‘buy’ rating restated by Numis Securities Ltd in a research note. Separately, analysts at Cantor Fitzgerald Europe reiterated their ‘hold’ recommendation on the stock and set a 60 pence price target on shares of French Connection Group in a research note on Friday.
The day French Connection Group presented its annual figures, its shares (LON:FCCN) opened at 42.09 pence, compared to a 1-year low of 38.25 pence and a 1-year high of 93.79 pence. The stock’s 50-day moving average is 54 pence, giving the company a current market cap of 40.48 million pounds.
The company said its current cash levels were 9.9 million pounds with no debt, compared with 12 million pounds a year earlier, reported Reuters.