SuperGroup Sees Profit at Upper End of Estimates

SuperGroup Plc, the owner of the Superdry clothing brand, forecast fiscal full-year profit will be toward the upper end of analyst estimates after sales almost doubled during the Christmas trading period.

SuperGroup shares rose the most since the stock first listed on the London stock exchange in March 2010. Sales in the nine weeks to Jan. 2 climbed 90 percent to 65.1 million pounds ($102 million), the Cheltenham, England-based company said in a statement today.

The retailer, whose clothes are worn by soccer star David Beckham and model Kate Moss, said higher cotton prices will not affect 2011 gross margins because of price increases for certain clothing items and renegotiations with suppliers. Cotton prices have almost doubled in the past 12 months as growers struggled to meet rising demand from China.

“We’ve been quite clever with price increases and I don’t think customers will be aware,” Chief Executive Julian Dunkerton said by phone. “Christmas trading is such a big part of our business, this Christmas there has been a division between winners and losers, and we are the ultimate winner.”

Retail sales grew 94 percent during the period while Internet revenue more than tripled, the company said.

Dunkerton said profit for the fiscal year ending in 2012 will be “above consensus.” “There will be a slight upgrade in market perception,” he said, without providing figures.

“We consider SuperGroup is built on solid foundations and we expect trading momentum may provide the basis for forecasts to be beaten again as the year progresses,” John Stevenson, an analyst with Peel Hunt LLP, said in an e-mailed note to clients. Stevenson recommends buying the stock.

SuperGroup expects a reduction of no more than 200 basis points to gross margins for 2012, according to the statement.

U.K. shop price inflation accelerated in December as stores struggled to contain the soaring cost of commodities including oil and cotton, the British Retail Consortium said today.

SuperGroup gained 226 pence, or 19.4 percent, to 1,390 pence at the 4:30 p.m. close in London, giving the company a market value of 1.1 billion pounds.

To contact the reporter on this story: Renee Lawrence in London at rlawrence7@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge in London at Ckeatinge@bloomberg.net

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