Profit warnings at retailers and suppliers have slowed significantly ahead of the golden quarter, according to the latest research.
UK-listed retailers issued five profit warnings in the third quarter, a sharp 55% downturn on the 11 in the same period of 2022.
It takes the sector’s total warnings for the first nine months of the year to 15, down 44% year-on-year, according to EY-Parthenon’s latest report.
Similarly, companies in consumer staples sectors – which includes supermarkets and fmcg companies – also saw a year-on-year fall, with just five warnings reported in Q3, compared with 12 in the same period last year.
Naked Wines was one of the businesses in the sector to downgrade its earnings expectations in September after trading was slower than forecasts.
However, Silvia Rindone, EY UK & Ireland retail lead, warned that despite the easing of cost and supply headwinds, retailers could find themselves vulnerable as they enter the Christmas trading period as consumer confidence remains “fragile”.
“Pricing and inventory will once again be key priorities for retailers during this period, with many consumers delaying festive spending in order to better manage their finances, and unseasonably warm weather during September affecting buying behaviours in fashion retail,” she added.
Nationally, UK-listed companies issued 76 profit warnings between July and September, marking the first time the quarterly total has fallen year-on-year since 2021.
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