The Superdry (LON: SDRY) share price continued its remarkable sell-off as concerns about the company’s growth continued. The stock plunged by over 20% on Tuesday to a low of 33p. This is a strong sell-off considering that it peaked at 492p in 2021 and 1,948p in January 2018.
Concerns about the company continue
Superdry stock price has been in a strong sell-off since 2018 as the company’s growth continued to decelerate. In its most recent results, the company said that its total revenue in FY 23 rose slightly to over £622.5 million. Its gross margins dropped to 52.8% while the firm’s statutory loss after tax jumped to over £148.1 million.
In the statement, the company’s founder and CEO lamented that the business was having a difficult year, especially in its wholesale business. As a result, he confirmed that his team was still working on a turnaround strategy.
It seems like business conditions have not improved since then. In a statement, the company said that its performance in the first half of the year was significantly below expectations. It attributed this performance to the unseasonal weather and delayed autumn/Winter range. In a statement, the CEO said:
“The unseasonal weather through the early autumn led to a delayed uptake of our Autumn/Winter range and this impacted sales in the first half of the year. Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance.”
As part of the trading statement, the first half of the year saw retail sales falling by 13.1% YoY and its wholesale falling by 41.1%. Its wholesale operations weakened because the company decided to exit its American business.
This is a continuation of what Superdry has done in the past few years. Its revenue jumped to over 872 million pounds in 2018 and has been in a downtrend since then.
Superdry is not the only UK fashion company under pressure. Other notable names like Boohoo (LON:BOOH) and Asos have plunged by more than 80% from their pandemic highs.
Superdry share price forecast
SDRY chart by TradingView
The daily chart reveals that the SDRY stock price has been in a deep sell-off in the past few years. This sell-off continued falling on Tuesday after its weak half-year trading statement. It has remained below all moving averages, signaling that bears are in control.
The stock plunged below the key support at 33.25p (previous YTD low) on Tuesday. Therefore, the outlook for the shares is bearish now that the company is struggling to turn around the business. This means that the stock could continue falling to the psychological level at 20p in the next few months.