Laura Ashley shares drop 10% as it warns on profits after poor Christmas

Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016, amid falling sales and rising costs.
The homeware and fashion chain warned it expects its full-year profits to come in below estimates, prompting the group’s shares to fall by 11 per cent this morning.
In the last six months, Laura Ashley’s sales fell by 3.5 per cent on a year ago, as the group failed to attract shoppers over the crucial Christmas period.
Falling profits: Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016

Falling profits: Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016
Tan Sri Dr Koo Kay Peng, Laura Ashley’s chairman, said: ‘Trading conditions have been demanding during the first six months of the year.
‘The board have reviewed the first half results and forecasts for the remainder of the year to 30 June 2017 and, given the continued market challenges, feels that net pre-tax profit for the year will fall below market expectations.’
Laura Ashley is still struggling to appeal to shoppers this year, with like-for-like sales in the six weeks to February 11 down 0.6 per cent. 
The group said its first-half profits were also knocked by rising costs after the pound’s plunge in value since the EU referendum, as well as the new national living wage, which contributed to a 6 per cent rise in operating costs to £52.3million.
Laura Ashley’s chief finance officer, Sean Anglim told the Press Association the group’s festive performance was hit as it had one less week of clearance sales compared with a year earlier, which knocked trading for big-ticket items like furniture. 
Sales: In the last six months, Laura Ashley’s sales fell by 3.5 per cent on a year ago

Sales: In the last six months, Laura Ashley’s sales fell by 3.5 per cent on a year ago
He said the firm remained optimistic despite the profit warning, having recently advanced further into two major overseas markets by signing up a new franchise partner in India and launching online in China for the first time late last year.
The group said like-for-like furniture sales dropped 8 per cent in the first half, while decorating sales fell 6.4 per cent and fashion down 3.2 per cent. Online sales grew by 2.1 per cent on a like-for-like basis. 
Shares in Laura Ashley are down 5.33 per cent to 17.75p.   

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Posted on February 17, 2017, in #retail, #uk, Other. Bookmark the permalink. Leave a comment.

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