Moss Bros warns over 'economic headwinds' despite solid results
MEN'S suit retailer Moss Bros has posted solid first quarter results, but warned that it will face "economic headwinds" this year as consumer confidence wanes.
The group said like for like sales rose 2.3 per cent in the 15 weeks to May 13, with total sales up 3.7 per cent.
But chief executive Brian Brick said that rising inflation linked to the Brexit-hit pound and zero wage growth will make for a "tough trading environment".
He said: "We are pleased with our progress and Moss Bros continues to trade well and in line with the board's expectations, despite the continuing tough trading environment and a highly competitive marketplace which has seen significantly more markdown activity than the same period last year.
"We continue to be acutely aware of the economic headwinds which we will face for the remainder of the financial year, as input cost increases come into effect.
"We are also mindful that zero real wage growth will impact on consumer confidence. We will remain agile in our response to these market conditions."
The firm has previously also flagged that the national living wage increase and the apprenticeship levy, as well as the effects of the devalued pound, would weigh on the retail sector.
Moss Bros added that like-for-like retail sales, including e-commerce, were up 5.5 per cent in the period, with the new season's ranges performing well.
However, comparable hire sales on a "cash taken" basis were down 14.2 per cent due to the "reduced value of the deposit taken from each customer".
The firm, which posted a 20.3 per cent rise in pre-tax profits to £7.1 million last year is gearing up for its peak trading season, which will take in weddings, school proms and Ascot.