Sosandar modifies FY26 guidance due to M&S cyber Incident and store strategy

Women's fashion brand Sosandar today announced its financial results for the year ended March 31, 2025 (FY25), highlighting a period of strategic transition focused on margin growth and improved profitability, which has led to a return to revenue growth in the first quarter of FY26. For FY25, Sosandar reported revenue of 37.1 million pounds, a decrease from 46.3 million pounds in FY24, while adjusted profit before tax reached 0.2 million pounds, a positive swing from a 0.3 million pounds loss in FY24.

In the post-period trading update for Q1 FY26 ended June 30, 2025, Sosandar net revenue reached 9.5 million pounds, a 15 percent increase compared to the same quarter of FY25. The company's own website also recorded 15 percent year-on-year growth, driven by increased traffic, conversion rates, and a higher number of orders from both new and existing customers. Gross margin continued to improve, reaching 65 percent.

However, due to the ongoing impact from the Marks & Spencer cyber incident and the decision to focus on the existing store portfolio, Sosandar has modified its FY26 guidance. The company now expects FY26 revenue to be up 18 percent to 43.6 million pounds, with an expected profit before tax of 0.4 million pounds, adjusting previous market expectations of 46.2 million pounds revenue and 1.5 million pounds adjusted PBT.

Ali Hall and Julie Lavington, co-CEOs of Sosandar, commented on the results: "During the last year we've strengthened the foundations of the business, which will enable us to deliver our growth and profit ambitions going forwards. Taking the decision to reduce price promotions has resulted in an expected reduction in revenue but significantly improved margins and cash generation which, in turn, has allowed the Group to maintain a robust balance sheet and self-fund its growth plan."

They added, "We have taken clear learnings from the trajectory of our stores in market towns versus shopping centres and are focused on getting our existing portfolio to profitability before opening any further stores. This decision, alongside the continuing impact from the Marks & Spencer cyber incident on our third-party sales, means we are moderating our expectations for revenue and profit growth in the current year."

The company attributed the reduction in FY25 revenue was a deliberate outcome of the company's strategy to move away from extensive price promotional activity on its own channels, a decision aimed at significantly improving gross margin. The strategy proved effective, with gross margin increasing to 62.1 percent, which, despite the revenue reduction, led to an improvement in profitability. After audit adjustments, including a 0.4 million pounds stock write-down and an additional 0.1 million pounds in warehouse move costs, the Group is reporting an audited 0.1 million pounds loss before tax for FY25.

Operationally, in FY25 the company transitioned Sosandar.com away from price promotional activity to drive higher gross margins. Trading with established third-party partners remained strong throughout the period. A significant milestone was the opening of its first six physical stores in FY25, marking the company's transition to a full-price multi-channel retailer. Additionally, Sosandar signed a licensing agreement with Next for a homeware range, building on the success of its clothing range sold through the retailer, and moved to a new third-party warehouse provider in February, better suited for its growth ambitions.