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    MKS   GB0031274896

MARKS AND SPENCER GROUP PLC

(MKS)
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Summer heat and World Cup leave Moss Bros out of fashion

09/21/2018 | 05:24am EDT

(Reuters) - Shares in suit retailer Moss Bros Group Plc lost almost a third of their value on Friday as the company warned its full-year profit would take a substantial hit after hot weather and the World Cup kept shoppers away from stores.

The chain is the latest UK retailer to blame this summer's heatwave and the soccer World Cup for disappointing performance.

"Menswear was specifically impacted negatively by the combination and longevity of these two external factors," Moss Bros' Chief Executive Brian Brick said, adding that the number of people shopping on the high street had dropped dramatically.

Like-for-like sales slid 6.9 percent in the first half ended July 28, the company said in its half-yearly report. Hire sales of clothing for special occasions, which accounted for around 12 percent of business, fell 7.8 percent.

Moss Bros shares slid 29 percent to seven-year lows in early trade, wiping around 13.5 million pounds off the company's market capitalisation. They recovered slightly to stand 13 percent lower at 40.40 pence by 0825 GMT.

"The company had endured a tough first quarter of its own making as it faced a shortage of stock due to supply issues," said analysts at AJ Bell.

"If the weather and World Cup are truly to blame for the recent rough patch then investors will expect to see a distinct improvement in performance when the company next updates the market."

Moss Bros, which dates back to 1851, now expects to report a full-year operating profit "materially below" analysts' expectations of 2.3 million pounds.

Brokerage Peel Hunt on Friday cut its forecast for Moss Bros' full-year profit before tax by 1.8 million pounds to 0.5 million pounds, with similar downgrades to future years.

MOUNTING STRAINS

After years of mounting strain, Britain's clothing sector has been upended in 2018 with giants such as Marks & Spencer and House of Fraser forced to shut stores as consumers shop online for cheaper goods.

Supermarkets, pubs and restaurants benefited from record temperatures in June and July and England's run to the last four in the World Cup, but clothing sales suffered as consumers spent less time shopping and delayed buying autumn ranges.

Online retailers like Boohoo Group Plc and ASOS Plc have bucked a tough market, outflanking and taking market share from traditional rivals burdened with the costs of big brick-and-mortar store networks.

But even they have been burned by unusually hot temperatures and Zalando, Europe's biggest online only fashion retailer, this week cut its 2018 outlook for the second time in as many months.

Moss Bros, which has more than 100 stores across Britain as well as an online operation, had already warned in March that a tough retail environment and significant stock shortages had hit trading and profit.

In May, however, the suit retailer painted a cheerier picture and said it was recovering from the challenges it had faced at the start of the year.

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Patrick Graham and Kirsten Donovan)


ę Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
ASOS PLC -5.81% 2614 Delayed Quote.-42.02%
BOOHOO GROUP PLC -4.41% 188.2 Delayed Quote.-42.52%
JUST GROUP PLC 0.43% 93.15 Delayed Quote.32.48%
MARKS AND SPENCER GROUP PLC 2.89% 182.55 Delayed Quote.30.56%
MOSS BROS GROUP PLC 0.00%End-of-day quote.-4.00%
NEXT PLC 0.28% 7860 Delayed Quote.10.58%
WILL GROUP, INC. -0.69% 1289 End-of-day quote.28.13%
ZALANDO SE 0.12% 80.16 Delayed Quote.-11.99%
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Analyst Recommendations on MARKS AND SPENCER GROUP PLC
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Financials
Sales 2022 10 385 M 14 278 M 14 278 M
Net income 2022 248 M 341 M 341 M
Net Debt 2022 3 243 M 4 459 M 4 459 M
P/E ratio 2022 14,2x
Yield 2022 0,76%
Capitalization 3 484 M 4 796 M 4 790 M
EV / Sales 2022 0,65x
EV / Sales 2023 0,61x
Nbr of Employees 69 577
Free-Float 99,7%
Chart MARKS AND SPENCER GROUP PLC
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Marks and Spencer Group plc Technical Analysis Chart | MKS | GB0031274896 | MarketScreener
Technical analysis trends MARKS AND SPENCER GROUP PLC
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TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 23
Last Close Price 177,95 GBX
Average target price 195,91 GBX
Spread / Average Target 10,1%
EPS Revisions
Managers and Directors
Steve Rowe Chief Executive Officer & Executive Director
Eoin Philip Tonge Chief Financial Officer & Director
Archibald John Norman Chairman
Carl Dawson Director-Information Technology
Stuart Machin Joint Chief Operating Officer & MD-Food
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