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Retailer QUIZ has questions to answer after major profit warning
Shares in QUIZ (QUIZ:AIM) have collapsed following a profit warning (5 Oct) that triggered sizeable earnings downgrades.
Slipped out at 2.38 p.m. on a Friday afternoon, the fast fashion brand warned of a £1.5m first half EBITDA (earnings before interest, tax, depreciation and amortisation) shortfall and materially downgraded full year sales and profit expectations.
Glasgow-based QUIZ’s profit warning reflects an unforeseen slump in sales from third party platforms, namely Next (NXT) and Zalando, and a poor September in its stores and concessions as footfall softened.
More predictable was the poor showing from concessions with embattled Debenhams (DEB) and House of Fraser.
Encouragingly, TOWIE ranges have been well-received, QUIZ is seeing very strong growth through its own websites, which carry higher margins, and the brand is growing internationally.
‘We still believe QUIZ is a good, progressive brand with a loyal following but clearly this is a backward step and the shares will likely tread water until the growth profile starts to reappear,’ laments stockbroker Peel Hunt. (JC)