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By Neil Maidment
LONDON (Reuters) - Fashion firm SuperGroup's (L:SGP) new boss said he would not react with price cuts after becoming the latest British retailer to warn on profits as warm autumn weather hits demand for winter wares.
Nine days after replacing founder Julian Dunkerton as chief executive, Euan Sutherland said low demand and fierce sector promotions had forced a more cautious take on a second half which makes up 70-80 percent of profit, hammering its shares.
The statement follows Next (L:NXT), Britain's No.2 clothes retailer, cutting its profit forecasts on Wednesday due to warm weather, prompting analysts to expect more promotions ahead of Christmas as rivals battle to shift unwanted stock.
"After a strong start to the quarter, September and October have both seen an exceptional period of warm weather across the UK and the rest of Europe which is expected to continue into November," SuperGroup, the firm behind the Superdry brand, said.
"This has resulted in a high degree of uncertainty around the future performance of the autumn/winter range, particularly outerwear ... a significant part of the Superdry product mix."
The group, whose logo emblazoned jackets, hooded tops, check shirts and jogging bottoms are popular with young people, makes almost a quarter of turnover from men's outerwear alone.
The firm said it expected full-year profit to be in the range of 60 million to 65 million pounds ($104 million), below market forecasts of 69 million to 73 million pounds, according to Reuters data.
Shares in the company, whose products are sold in more than 100 countries via stores, concessions and its website, slumped as much as 12.5 percent to a year low and were down 8 percent to 815 pence at 0946 GMT.
NO BITES
While some analysts have said to expect another sea of "sale" signs in retail shop windows this Christmas, SuperGroup said it had no plans to change its pricing strategy in response to the dip in trade, preferring to protect its brand.
"When the fish aren't biting then there's no point in adding further discount to that," said Sutherland, who added he remained "excited" about the group's expansion prospects.
Chief Operating Officer Susanne Given said the firm's strong margins meant it could hold any overstock until next year for its outlets.
Cantor Fitzgerald analyst Freddie George retained his "buy" rating on the firm but was less upbeat on its prospects this Christmas, chopping his pre-tax profit forecast to 62 million pounds from 69 million pounds.
"For H2/FY15, we are concerned that the company ... will not have any 'mega sellers' in Q3 as in previous years and will be impacted by a more discount driven market ahead of Christmas in response to the milder weather," George said.
Total retail sales, including from new shops, in the 13 weeks to Oct. 25 rose 11.4 percent but fell 4.2 percent at stores open over a year, with trading becoming much more difficult in recent weeks.
In its wholesale division, delayed orders due to the tough conditions sent sales down 3.7 percent during the period, which is the company's second quarter.
($1 = 0.6263 British pound)
(Editing by David Clarke and David Evans)