Fashion retail group QUIZ (QUIZ,) told investors today that it had seen a 17% increase in revenue to £91.7 million in FY23, driven by its omnichannel model, however, reported lower like-for-like revenues in recent months as it warned about the continuing pressures on consumer spending.
The early months of FY23 saw a strong recovery in consumer demand following the removal of coronavirus-related restrictions, although year-on-year growth subsequently moderated due to inflationary pressures impacting consumer confidence. Despite these headwinds, QUIZ expects increased profitability in FY23, with gross margins consistent with the previous year and a profit before tax of at least £2.0 million.
The company's net cash balance at 31 March 2023 was £6.2 million, comprising a cash balance of £7.6 million offset by a £1.4 million drawdown of available bank facilities, compared to a net cash balance of £4.4 million in FY22.
QUIZ added that FY23 profit before tax is anticipated to be in line with current market expectations, however, widely reported and significant pressures on consumer spending seen in recent months are expected to continue into the new financial year, impacting consumer demand in the fashion retail sector over the coming months.
Tarak Ramzan, CEO of QUIZ, commented: "The Group delivered a good performance in FY23 achieving revenue growth across each of its channels reflecting the strength of QUIZ's trademark dressy and occasion wear product offering.”
"Whilst the external trading environment is expected to remain challenging in the near term, we remain highly confident in the Group's long-term prospects."
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QUIZ has managed to navigate external headwinds to the best of its ability, namely through its flexible business model and differentiated brand, however, like many other clothing brands, has struggled to generate revenues in recent months amid increasing pressures on consumer spending.
On top of consumer confidence, the fashion retail sector has been victim to other unfavorable macro conditions that have persisted into 2023 - most notably disruptions to supply chains and the energy crisis - which are expected to continue to weaken the fashion retail market in the year ahead.
More broadly, in the retail sector, a small glimmer of hope can be taken from GfK’s Consumer Confidence Index, which unexpectedly increased by two points in March, yet, the data was accompanied by commentary highlighting that the cost-of-living crisis continues to be a ‘harsh reality’ for most.
On a lighter note, QUIZ said it remains highly confident that the strength of its brand and the group's model will provide a solid basis for future growth. The company expects to publish its FY23 results for the financial year ended 31 March 2023 in July 2023, so make sure to to not miss this update.