Bonmarche Holdings' (LON:BONB) 52-week trading update has confirmed that it will deliver FY PBT in line with the board’s expectations. FY sales were down 0.5%, reflecting both a tough H2 comparison and difficult trading conditions in Q4, as has been seen more widely in the UK clothing market. Gross margins proved resilient despite FX headwinds, which suggests that the company has plenty of scope for self-help. We expect consensus forecasts to remain unchanged following the FY trading update on 20 April.
What’s new?
Although difficult trading conditions in UK clothing have resulted in sharply reduced Q4 sales, the company is showing resilience in delivering full year PBT in line with internal expectations, underpinned by the strategy outlined at the FY17 results. Online sales have been strong, up 34.5% over 52 weeks and up 31.2% even in Q4 on a q-o-q basis. Full year profitability is assisted by stable gross margins even in the face of FX headwinds. This has been achieved by better buying and reduced markdowns. In addition, the company has delivered operating cost savings through improved operational efficiencies and reduced, but more effective marketing spend.
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