Portmeirion Group has announced that it expects its sales and profits for the full year to be significantly below current market expectations. The pottery company, known for its namesake brand as well as Royal Worcester and Spode, attributes this decline to the cautious approach taken by North American retailers, despite strong end-user demand.
As a result of this caution, shares of Portmeirion Group have fallen by 28%. The company first disclosed the North American customers’ cautious behavior in May, and this trend has continued since then. The caution is primarily noticeable among national department stores, reflecting a weaker economic climate and a more conservative approach to stock levels.
Portmeirion Group anticipates that this caution will persist throughout the second half of the year, leading to a deviation from current market views. Although the company did not provide an exact figure, it expects sales for the first half of the year to decline by 3% to £44.0 million ($56.9 million).
Despite these challenges, Portmeirion Group has made pleasing progress in other markets and is performing better than last year. It is worth noting that end-user demand in North America remains strong, which should lead to restocking by retailers in the near future. Additionally, the company’s forward order book for the upcoming Christmas period is ahead of the same time last year.
In conclusion, Portmeirion Group acknowledges the caution exhibited by North American retailers and expects a negative impact on its sales and profits. However, it remains optimistic about its performance in other markets and anticipates increased restocking by retailers in due course.
