TheWorks first-half sales beat expectations but costs rise on supply chain woes

163 PLC (LSE:WRKS) said trading in the first half was stronger than expected with total sales rising 17.9% and like-for-like sales growing 14.5% compared with two years ago, before the COVID-19 pandemic struck.

The gift, toy and stationery retailer said in a statement that early signs for Christmas sales are positive, but cautioned that its business has been affected by shortages of global ocean freight and lorry drivers in the UK.

It has taken action to secure the supply chain and expects to have sufficient stock to achieve its sales plans, although it has incurred “significant” additional costs.

Signs that customers are shopping early for Christmas is a positive indicator that strong demand will continue into the peak Christmas trading period, the company said.

It expects results for the full year to be in line with expectations, despite higher freight costs.

The company said the first half was boosted by good progress with its new strategy to focus on digital growth and its existing stores and by “staycations” which led to strong consumer demand.

Online sales in the six months to end-October were double those in the comparable period two years ago.

“It’s clear from these results that our products resonated extremely well with customers during the pandemic, helping them to read, learn, play and craft through lockdown,” said chief executive Gavin Peck.

“We are cautiously optimistic about prospects for our peak sales season and our ability to trade through the ongoing supply chain challenges faced by the majority of our sector.”

Shares fell by 1.75% to 56.00p in midmorning trade.


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