Shares in Superdry have plunged after the clothing brand warned that its annual performance will be weaker than previously expected.
Underlying profit before tax fell 49% to £12.9 million in the 26 weeks to October 27.
The company now expects profits in the current financial year to be somewhere between £55 million and £70 million. Analysts had predicted around £84 million.
Revenue was up 6.4% to £831.8 million, though this was driven by online sales as store revenue decreased.
Shares in Superdry fell 31% to under 400p in early trading.
It comes amid a boardroom bust-up between the current management and Superdry’s co-founder, Julian Dunkerton, who is trying to stage a comeback at the company.
Superdry chairman Peter Bamford said on a call with journalists this morning that the board believes Mr Dunkerton’s views on strategy “have not evolved with the needs of what is now a multi-channel, international and increasingly digital retailer”.
The group is to complete a review of its store portfolio by the end of March next year and will consider closures, downsizing, relocation or renegotiation of rents as it looks to cut costs.
The company blamed unseasonably warm weather for the poor performance of the first half, given its reliance on sales of jackets and winter clothing.
But chief executive Euan Sutherland reiterated his confidence in the current strategy, which will see the brand diversify its ranges.
“Our comprehensive transformation will ensure Superdry is well positioned as we optimise our routes to market and make our business more efficient,” he said.
“We are confident that our transformation programme combined with the underlying operational strengths of the business will deliver a return to higher levels of growth and profitability while realising geographic expansion opportunities and leveraging our multi-channel operating model to serve customers in whichever way suits them best.”
As part of the new strategy, the company also announced today the launch of a kidswear range. The move has been criticised by Mr Dunkerton, who says it will weaken demand for the brand among teenagers.
But Paula Kerrigan, Superdry’s director of strategy, said: “We know our existing customers want to see us offering Superdry Kids and we believe this also offers a real opportunity to bring new consumers to our exciting brand. We will disrupt the kidswear market by relentlessly innovating product while offering Superdry’s exceptional quality, design detail and value for money.”