Made.com slashed its full-year guidance on Tuesday as it highlighted a drop in demand for big-ticket items, sending shares in the furniture retailer tumbling.
For 2022, Made now expects gross sales to fall between 15% and 30%, down from previous guidance of no growth to -15%. Net revenue is expected to decline between 9% and 24%, versus previous guidance of between 8% growth and a 7% decline.
It also expects to make a loss before interest, tax, depreciation and amortisation of between £50m and £70m, down from previous guidance for a loss of £15m to £35m.
“Recent trading has been volatile, and the worsening of consumer confidence has impacted demand for discretionary big-ticket items, making new customer acquisition at financially attractive rates challenging,” it said.
For the first half, group sales were down 19% versus the previous year, and 55% higher compared to the same period in 2019.
The company said profitability in 2022 is expected to be dented by around £20m of non-recurring costs primarily in two areas. Firstly, additional promotional and clearance activity related to excess inventory in the business, following the strategic inventory build set out in its prospectus last year. Secondly, additional costs in the supply chain due to disruptions at ports and extra handling at warehouses.
Both items are expected to “substantially normalise” in the second half as inventory levels reduce.
Chief executive Nicola Thompson said: “It’s clear that things are tough for consumers at the moment. 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.”
At 0817 BST, the shares were down 39.5% at 23.34 p.