SuperGroup smartens up its act

It admits that the issues faced have reflected the rapid growth seen over past three years - a period in which sales have grown 125 per cent - and the management team has been strengthened in response to a damaging series of supply chain and accounting errors that saw profit forecasts radically pruned throughout the year. Indeed, while the 14.7 per cent fall in underlying pre-tax profit to £42.8m was in line with analysts' expectations, it's a far cry from the £76m the market had originally expected the group to deliver this year.

While the changes will undoubtedly help to restore management's credibility, it's too early to tell whether they will help get growth back on track. Admittedly, the disappointing 2 per cent like-for-like sales growth in the UK was partly the consequence of problems with the new warehouse management system implemented in August, which meant stores were stocked incorrectly for over three months. These were resolved in time for the important Christmas trading period, but trading in the first 10 weeks of the financial year was affected by the wet weather at home and challenging economic conditions in continental Europe. While management says recent results have been "broadly" in line with expectations, it declined to put a figure on that.

Meanwhile, SuperGroup will continue its physical expansion and is aiming to add 70,000-80,000 square feet of its own space across the UK and Europe this year, as well as 30 new international franchise stores, including its first stores in India with new partner Reliance. Analysts point out, however, that this is a slower rate than previously expected, suggesting a new found note of caution that could see more more bullish growth expectations pared back.

Broker Espirito Santo expects underlying pre-tax profit of £40m for 2013, giving EPS of 36.6p (38.1p in 2012).