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Investing.com — London-listed shares in Made.com (LON:MADE) tumbled by more than 38% on Tuesday after the online home goods retailer slashed its annual profit guidance, citing the negative impact from a nearly £20M increase in one-off costs.
In a trading update, Made.com said it now expects to report a loss before interest, tax, depreciation, and amortization for 2022 of between £50M to £70M. The company previously predicted a full-year loss of between £15M and £35M.
Gross sales are also seen slipping by 15% to 30% against a prior guidance of flat to 15%. Net revenue is also forecast to decline by as much as 24%.
Made.com warned that profitability in 2022 will take a particularly hard hit from heavy price markdowns caused by high inventory levels, as well as a surge in supply chain costs stemming from disruptions at ports and warehouses. Demand has also flagged, with Made.com warning that “no near-term improvement” has been in sales of discretionary big-ticket items or in new customer acquisition.
“It’s clear that things are tough for consumers at the moment,” said Made.com chief executive officer Nicola Thompson in a statement. “Understandably, we’ve seen a worsening in consumer confidence since May and this has had an impact on this period’s performance. As such it’s prudent for us to take a conservative view of what we can expect in the second half of this year.”
In the company’s first half, gross sales dropped by 19% compared to the same period last year, due in part to weak performance in both the United Kingdom and continental Europe. However, demand remained elevated against pre-pandemic levels.
Shares in Made.com have slipped by more than 80% over the past year.
