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Surfstitch cuts guidance as losses narrow

Troubled online clothing retailer Surfstitch has lowered its full-year earnings expectations after posting a narrowed $8.3 million half-year loss.

Surfstitch said it experienced “trading headwinds” from late December through to February and downgraded its full-year earnings guidance to an underlying loss of $5-$6.5 million, from the previous forecast of a $4-$5 million loss.

The loss for the six months to December 31 of $8.3 million was down from $14.5 million a year earlier.

Revenue for the half was down 13 per cent to $106.3 million, which the company attributed to a stronger Australian dollar and lower sales in the North American market.

Chief executive Mike Sonand, who was appointed last June following the surprise exit of founder and CEO Justin Cameron, said the company had made progress containing costs and was “building a solid foundation” to operate the global business.

The company has also announced a “retention equity incentive award” to Sonand, who will receive three million performance rights under the plan, which the board says is in recognition of his work to “stabilise and refocus” the company and to secure his continued performance.

The board also appointed Abigail Cheadle as a non-executive director, following its announcement in December last year to establish a smaller board comprised primarily of non-executive directors.

Cheadle has experience in technology, corporate restructuring and forensic accounting gained in a career predominantly spent in Asia and Australia with companies such as EY, Deloitte and more recently, KordaMentha.

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