The Works in-store sales rise but online arm struggles as the group strikes cautious tone ahead of key Christmas trading period
- The Works saw sales climb 2.1% in the six months to the end of October
- Store sales increased but online sales fell nearly 17%, the group said
The Works saw sales climb 2.1 per cent in the six months to the end of October, fresh results from the retailer reveal.
Total like-for-like sales rose by 0.6 per cent, as a 3.5 per cent jump in store sales offset a 16.9 per cent decline in online sales over the period.
The Works shares fell sharply today and were down 10.14 per cent or 3.50p to 31.00p this morning, having fallen by over 45 per cent in the last year.
Sales: The Works saw online sales fall by nearly 17% in its half-year to the end of October
The group’s sales were hit by operational issues earlier this year in the aftermath of a cyber security incident in March.
But, the retailer enjoyed strong growth in the summer, when its refreshed outdoor play range performed well, followed by a record ‘Back to School’ season.
The company said the expansion of its book offerings had been a great success, with recent new titles such as Diary of a Wimpy Kid: Diper Overlode by Jeff Kinney, The Bullet That Missed by Richard Osman and It Starts With Us by Colleen Hoover proving to be particularly strong sellers.
Gavin Peck, chief executive of The Works, said: ‘We have delivered a resilient performance in the first half with positive sales growth overall, demonstrating continued progress against our “better, not just bigger” strategy.’
He added: ‘Although it is very difficult to predict what Christmas will look like this year, we believe that the great products and fantastic value we offer will be more important than ever, with families still looking to celebrate Christmas but in a more affordable way.
‘The Works has proven itself to be a resilient business and we remain confident in our ability to make progress on our strategy and deliver growth in the medium term, supported by a robust balance sheet.’
The Works said it had a net cash stash of £11million by the end of the period.
Looking ahead, the retailer said it remained ‘cautious’ with regard to how consumer spending might be affected by higher inflation and interest rates during the crucial Christmas season and the remainder of its fiscal year.
It added: ‘However, with our value proposition more relevant than ever and being well-placed operationally for Christmas, the Board’s expectations for the FY23 result remain unchanged.’
Russ Mould, investment director at AJ Bell, said: ‘Times are tough on the high street and seller of bargain books, arts and crafting supplies The Works is seeing sales growth slow.
‘While there are some extenuating circumstances and it’s only a slight softening that’s been reported for now, as an indication of the direction of travel it is not hugely encouraging’
He added: ‘The Works is at least partly reliant on impulse purchases and people have no choice but to be more disciplined with their spending.
‘That said, heading into the festive period it will be an obvious destination as people look to do Christmas on a budget and that underpins management’s confidence about the outlook for the coming weeks.
‘Unlike some of its retail rivals, The Works at least benefits from a balance sheet in decent shape and it has a clear value-based proposition which should be well aligned with the current economic climate.’