The retailer also expects to offset more than 80% of the absolute gross margin decline through cost savings
N Brown Group PLC (LON:BWNG) said it is trading in line with expectations after posting an improvement in sales compared to the start of the pandemic.
Full-year adjusted underlying earnings (EBITDA) are forecast to come in at £84-86mln, from £106mln a year ago.
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The retailer also expects to offset more than 80% of the absolute gross margin decline, driven by the pandemic’s impact on sales and bad debt provisions, through operational cost savings.
However, depreciation is estimated to be higher than last year due to the change in strategy, while year-end net debt is forecast to be £285-305mln, down from £497mln in February 2020.
Revenue in the 18 weeks to January 2 dropped 9%, improving from a 13% slip in the 13 weeks to August 29 and a 22% fall in the 13 weeks to May 30.
Customer trends in the period continued to reflect the COVID-19 environment, with particularly strong demand for computing, gaming and white goods, while Home & Gift sales now comprise 42% of product revenue, compared to 32% in the same period last year.
Within Apparel strong growth in leisurewear and nightwear was offset by a decline in dresses, formalwear and swimwear.
Last month, the JD Williams owner has completed its £100mln capital raising and move to AIM, which allowed to repay all unsecured debt and further invest in digital capabilities.
The former catalogue retailer said it is currently experiencing delays of two to three weeks for many of our stock deliveries, given global container issues, as well as cost pressure in the supply chain.
Read More: N Brown Group PLC trading in line with expectations as sales improve