Profit warning issued by The Works
Retail chain The Works enjoyed sales growth of 3.4 per cent in the half year to October 29, but it has issued a profit warning due to growing uncertainty for its Christmas trading period.
The arts, crafts, toys, books and stationery business, which has its head office at Hams Hall Distribution Park, Coleshill, Birmingham, says that sales in the six weeks between now and Christmas will have a significant bearing on the overall result for the financial year.
Last year shoppers left Christmas shopping until very late in the season.
Chief executive Gavin Peck said: "The first half of the year has been challenging for the retail sector as cost-of-living pressures continued to weigh on households. We have focused on delivering excellent value for our customers, adapting as best we can to the tough trading conditions, and I am proud of the way our colleagues have rallied together and responded.
"Consumer sentiment softened towards the end of the period, which resulted in early discounting across the sector and increased uncertainty as we head into the Christmas period. Recognising the competitiveness of the market we have responded with more promotional activity, which we expect to continue as we approach Christmas. Families will want to celebrate Christmas affordably and our value proposition makes us an ideal choice for them."
It expects trading conditions during the second half to remain challenging and that consumer spend will be subdued as a result, which creates a high level of uncertainty with regard to sales.
The Works also says that it’s necessary to have a higher-than-planned level of discounting to remain competitive and has therefore revised its likely full year result and expects its adjusted earnings before tax to be £6 million.
