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Highlights:
- Sosandar (AIM) lowers full-year revenue guidance to £40 million after first-half sales dropped to £16.2 million.
- Gross margin improved to 62.2%, and pre-tax losses narrowed to £0.70 million.
- Strong trading in newly opened stores, with increased footfall and website traffic in surrounding areas.
Sosandar PLC (LSE:SOS), the womenswear retailer, saw its shares fall by 5% as the company reduced its full-year revenue guidance following a drop in sales during the first half of the year. The company reported revenues of £16.2 million for the six months ending 30 September, down from £22.2 million the previous year. This decline came as the retailer shifted focus towards profitability and opened its first three physical stores on UK high streets.
Despite the dip in revenue, Sosandar saw improvements in other key financial areas. Gross margin increased to 62.2% from 55.4%, and pre-tax losses narrowed to £0.70 million from £1.30 million. The company ended the period with £7 million in cash, reflecting the timing of stock arrivals and capital expenditure associated with the opening of its new stores in Marlow, Chelmsford, and Gateshead.
The retailer noted strong performance across all three stores, with a significant increase in website traffic in areas surrounding the physical locations. Co-CEOs and co-founders Ali Hall and Julie Lavington expressed optimism about this new chapter in the company’s growth, describing the store openings as a key milestone in the transition towards becoming a multi-channel retailer. They highlighted the strong footfall and customer conversion rates seen at the new stores.
Looking ahead, Sosandar said that trading in the second half of the year has started strongly, with revenues already ahead of last year. However, the company revised its full-year revenue guidance down to £40 million, compared to the City’s previous expectations of £45.6 million. Despite this, Sosandar maintained its profit outlook for the year, projecting pre-tax profits of £1.0 million.
The company’s decision to focus on profitability rather than aggressive sales growth, combined with the launch of its high-street stores, marks a significant shift in strategy as it adapts to changing market conditions and consumer preferences.
