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Quiz issues profit warning after online sales disappoint

UK fashion retailer Quiz said on Friday afternoon that it anticipates EBITDA for the first half of the current financial year will be £1.5 million lower than its previous expectations.

The profit warning came as it reported lower than expected sales through third-party online partners in the second quarter of the financial year, as well as a stagnated performance by its UK stores and concessions during September. The fall-out from House of Fraser’s collapse and consequent supplier partnership issues under new ownership was also said to have had an impact.

Quiz said that if the downward trend in online third-party sales continues during the second half of the financial year, group revenue for the full year to 31 March 2019 would be lower than current market expectations at approximately £138 million. EBITDA for the full year would then be in the region of £11.5 million, it said.

Tarak Ramzan, CEO of Quiz, commented: “Although online sales through our third-party partners have been disappointing and will impact the group's performance for the full year, the changing mix towards increased own-website sales will support profitability growth moving forward.

“The continued growth of the Quiz brand in combination with our well-invested infrastructure and flexible business model continue to underpin the board's confidence in the group's long-term prospects."  

Quiz said group revenue increased by 19% to £66.7 million in the first half of its financial year.

Sales in its UK standalone stores and concessions increased by 9% to £35.1 million, but footfall slipped considerably in September to rein in the group's growth.

Online revenue at the retailer increased by 44% to £20 million in the first half, with its own websites experiencing a 70% rise in sales year-on-year. Online sales through third-party websites were at a similar level compared to the second half of the last financial year, which was behind expectations.

Despite the reduction in estimates, EBITDA for the first half of this financial year will not be less than £5.5 million, Quiz said.

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