N Brown Says Trading in New Financial Year Subdued

LONDON, United Kingdom — British plus-size fashion retailer N Brown Group Plc expects a hit of about £3 million on full-year profit before tax in the new financial year, and said trading so far has been subdued.

Shares of N Brown, known for its brands SimplyBe and JD Williams, fell as much as 13 percent to 273 pence, the top loser on the FTSE 250 midcap index.

N Brown said sales were lower from a year earlier in financial year 2017, citing a challenging industry backdrop since January and also a change in marketing approach.

The Manchester-based company expects full-year product gross margin to be lower by 50 basis points to 150 basis points, hurt by foreign currency headwinds and clearance of aged inventory, among others.

"Low metrics reflect weak sentiment after missing revenues/profit expectations 18 months ago and slower-than-hoped strategic progress," analysts at N+1 Singer wrote in a note.

The brokerage cut ratings on the stock to "Hold" from "Buy."

N Brown, which has reduced its range of non-core home and electrical items to focus on fashion clothing, said it adjusted its marketing approach this season, shifting from large TV campaigns to a more phased approach, with increased investment in digital channels.

The retailer posted a 2 percent drop in underlying profit before tax to £84.5 million for the year ended Feb. 27, in line with expectations.

By Aastha Agnihotri; editor: Sunil Nair.