Best & Less Group (BLG) has reported that total sales are up 22.8% in the first 20 weeks of FY23 ahead of the same period in FY22.
Like-for-like (LFL) sales are -7.4% overall, with store LFL sales -2.3% and online sales -32.9%, noting that sales in the prior corresponding period (PCP) were significantly impacted by lockdowns and trading restrictions in several states.
After reporting +38.0% total sales growth for the first eight weeks of FY23, BLG reported that sales growth has since moderated, reflecting the delayed start to summer weather and supply chain delays.
BLG is also cycling inflated sales in Q2 FY22, when NSW, Victoria and New Zealand emerged from lockdown and consumers returned to shopping in re-opened stores in large numbers.
With the major shopping season ahead, including Black Friday and Christmas, the Group expects a strong finish to the first half of FY23. It noted that around ~60% of first half profits are typically recorded in the final six weeks.
BLG said while unaudited YTD earnings to the end of October are in line with the PCP, a significant increase in sales growth from current levels is required to maintain this result for the first half.
BLG also report an “excellent” inventory position, having sold through significantly more winter stock than in the PCP, with aged stock representing only 1.8% of total inventory.
Nearly all seasonal stock is newly arrived summer stock.
With the expected benefit of sales being deferred to H2 FY23, and assuming the absence of the impact of COVID as experienced in the PCP, BLG expect second half sales to exceed the PCP, with gross margin percentage to be in line with that achieved in the PCP.
BLG executive chair Jason Murray said the Group is gaining positive trading momentum, buoyed by its recent investment in lower pieces and its seasonal inventory position.
“With six weeks to go and the major shopping season ahead of us, we expect a strong finish to the half and for our summer product to perform well through Q3,” Murray said.
“Looking ahead, we expect value conscious shoppers to continue to be attracted to our differentiated specialty value offer, and we will retain our relentless focus on preserving margins and driving cost efficiencies.”