The Works navigates complex challenges, revealing a mixed financial outlook but remains optimistic for Christmas.
- Despite a 33% drop in adjusted EBITDA, The Works is focusing on future profitability by improving product margins and reducing costs.
- The company recorded a slight sales increase of 0.9% overall, with a notable 12.4% decline in online sales.
- Leadership changes signal a strategic evolution, aligning with the company’s growth-oriented goals.
- Operational adjustments and strategic planning position The Works for a promising holiday season.
The Works, a value retailer, has reported both flat sales and a 33% decrease in adjusted EBITDA, down from £9 million to £6 million, for its fiscal year ending May 5. This decline comes as the company faced a persistently challenging consumer environment coupled with escalating costs during the prior Christmas season. In response, The Works has implemented strategic actions aimed at enhancing product margins and minimizing expenses, thereby fortifying its financial standing for Fiscal Year 2025.
Despite these financial hurdles, The Works experienced a slight rise in overall sales, climbing 0.9% to £282.6 million. However, there was a significant disparity between in-store and online sales performance. Store sales, responsible for 90% of revenue, inched up by 0.6%, while online sales witnessed a substantial 12.4% decrease.
Gavin Peck, The Works’ CEO, expressed optimism despite the challenging backdrop. “Against a persistently challenging consumer backdrop and tough Christmas trading, we were pleased to end FY24 in line with market expectations,” he stated. Peck emphasized the strategic progress and refinement underway to transform the business, aiming for improved performance and increased shareholder returns.
The leadership within The Works has seen noteworthy changes, particularly the resignation of two representatives from Kelso Group from the board. This transition followed a successful period where key initiatives, including the company’s transfer from the Main Market to AIM, strengthened its governance and leadership.
Looking ahead, The Works is strategically poised for the upcoming peak Christmas trading period. Operational improvements and strategic foresight are expected to bolster the company’s ability to support a fruitful holiday season, reinforcing its commitment to customer satisfaction.
The Works’ strategic and operational advancements have set the stage for a potentially successful Christmas trading period despite previous financial challenges.
