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(Corrects that TheWorks's first quarter ended on July 31, and that total sales numbers were on a like-for-like basis.)
TheWorks.co.uk PLC on Monday shares fell sharply after its board ‘materially lowered its expectations’ regarding its results for the financial year 2023.
TheWorks shares fell 20% to 37.00 pence each in London on Monday afternoon.
The Birmingham-based toys, crafts and stationary retailer said it is facing historically high freight costs, rising costs of living, and increases to the national living wage in the UK, giving a cautious outlook for financial year 2023 which started in May.
TheWorks still expects to pay a dividend of 2.4p per share for its financial year 2022 ended May 1, which it had said it expected on May 20.
Meanwhile, the firm posted an update for its first quarter that ended July 31. Total like-for-like sales were down 2.5% to a year ago due to a 29% like-for-like sales slide in online sales. Store sales were up 1.4% on a like-for-like basis however. The company expects underlying earnings before interest, tax, depreciation and amortisation at £16.5 million, higher than its previous guidance of £15.0 million as provisions relating to stock were at a lower than expected level.
‘We delivered a strong performance in financial year 2022 and will report a better than expected profit, as well as reinstating the payment of a dividend. Since the start of the financial year we have faced the residual effects of the cyber security incident and increasingly challenging trading conditions. The progressive recovery of store trading throughout the period is reassuring and we are pleased with the resilient performance delivered considering the lower consumer confidence,’ said Chief Executive Officer Gavin Peck.
The retailer aims to release its full year results on September 23.
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