New Look seeing 'green shoots' as earnings stabilise
New Look said on Tuesday that it was seeing "green shoots" in womenswear as the retailer reported a stabilisation in first-quarter earnings.
In the 13 weeks to 23 June, revenue slipped 2.7% to £324.4m and brand like-for-like sales were down 4%, although this was an improvement on the 8.2% drop seen in the first quarter of last year.
Adjusted earnings before interest, taxes, depreciation and amortisation rose 1.5% to £27.6m, supported by cost savings and underlying profit in the quarter was 19% higher at £14.4m.
The company, which is closing down 70 stores through a company voluntary arrangement, said it achieved £70m of annualised cost savings in the first quarter and identified further cost savings.
New Look said that both in-store and e-commerce customer conversion rates improved, while e-commerce profitability increased "substantially". In addition, the click and collect sales mix increased to 40% from 27% in the first quarter of last year, driving footfall into stores.
Executive chairman Alistair McGeorge said: "We previously said that our focus is to achieve financial and operational stability. In Q1 we made good progress in stabilising profits and delivering on our cost savings plan, with encouraging green shoots seen in womenswear.
"We ended the quarter with a clean stock position and have seen improved sales performance in the areas we have addressed so far in our product review. We are confident there is more to come as we focus on our remaining product ranges.
"Our turnaround plans continue, and we will deliver further operational efficiencies whilst maintaining our resolute focus on our core strengths and heartland customer to ensure we remain on the right track."
In its full-year results back in June, the retailer posted an adjusted EBITDA loss of £10.7m and a 7.3% decline in revenue, with brand like-for-like sales down 11.4% and UK LFL sales 11.7% lower. Own website sales were 19.2% lower in the year, while third-party e-commerce sales pushed up 15.5%.