Fast fashion womenswear brand Quiz (QUIZ:AIM) is confounding the naysayers this morning. Shares in the company are bid up 4.8% to 165p on strong maiden half year results and a confident current trading statement.
Despite cut-throat competition among clothing retailers and a UK consumer squeeze, Quiz’s product offering is clearly chiming with younger, social media-savvy female shoppers.
The Glasgow-based retailer looks set fair for the all-important Christmas period.
FABULOUS FAST FASHION ADDITION
As Shares outlined in our recent Under The Bonnet article, Quiz is among a new breed of ultra-fast fashion brands disrupting the retail market place.
It specialises in occasion wear and dressy casual wear that helps females, mainly in the 16-35 year old age bracket, stand out from the crowd.
Distinctive, glamorous own-brand lines are growing rapidly. And just like fast-fashion winners ASOS (ASC:AIM) and Boohoo (BOO:AIM), Quiz boasts a burgeoning social media following and is successfully leveraging celebrity and blogger collaborations to raise brand awareness and boost sales.
GROWING AT GREAT PACE
Though the backcloth for retailers is challenging, Quiz’s half year results to September are outstanding.
Total sales up 35.2% to £56.1m, driven by a surge in online sales, impressive 15.2% growth in UK standalone stores and concessions, as well as overseas revenue up 26.1% to £10m, reflecting growth through stores and concessions in the Republic of Ireland and Spain and via franchises in 20 countries.
December will also see Quiz make its first direct sales in the US when the company begins trading with department store chain Lord and Taylor in New York.
‘The group's strong performance is a reflection of the growing awareness of the QUIZ brand and increasing demand for our products that offer the latest glamorous looks and occasion wear at great value,’ enthuses CEO Tarak Ramzan.
DIVIDEND GROWTH ON OFFER
Income-hungry investors should also note a £4.2m improvement in net cash flow to £5.8m and a net cash position of £11.9m, the latter boosted by July’s AIM IPO proceeds. Quiz reiterates its intention to paying a maiden dividend for the current financial year to March 2018.
Shrugging off well-documented industry difficulties, Quiz also reports positive sales momentum across all channels, with sales up 32.9% in the seven weeks to 18 November.
Panmure Gordon analyst Peter Smedley sees support from the retailer’s ‘well-planned, high-revenue promotional events such as Black Friday’, as well as ‘an attractive Autumn/Winter stock package across all the price points and higher margin gifting products such as accessories’.
He believes ‘Quiz is a rarity; One of the sector’s most compelling structural growth stocks, underpinned by an omni-channel distribution matrix of growth across a burgeoning online channel, a disciplined UK store/concession roll-out, and still nascent International opportunities - all of which are similarly net profit accretive as a percentage of revenues.'
