Sales at Portmeirion Group dipped slightly in the first half of the year as a key market continued to exercise caution on ordering, according to a trading update.
The ceramics manufacturer, based in Stoke-on-Trent, has reported that half-year sales for the six months to 30 June 2023 are expected to be £44 million, down three per cent on the same period last year.
This has mainly been put down to caution from customers in the US and Canada, which has been “particularly noticeable” amongst national department stores as they react to the weaker economic climate and take on a more conservative approach to stock levels. Sales in North America are down 14 per cent on a year-on-year basis.
However, the company says there are strong order books for the US market, with Spode’s Christmas ranges up double digit on last year. Customer demand in North America remains robust and the end-consumer demand should support restocking by retail customers in due force.
The trading update issued yesterday, 20 July, reads: “In terms of the full year outlook, it is challenging to assess how long the North America caution amongst our retailer customers will endure and whilst we note the encouraging end customer sell through data and our strong Christmas order book, the Board believes that it is prudent to assume that this caution will continue through the second half resulting in the Group’s sales being below and profits for FY23 being significantly below current market consensus.”
Other markets are ahead of last year and in line with expectations, whilst ceramic sales in rest of world markets are up 10 per cent and sales in its home fragrance business, Wax Lyrical, are up 15 per cent.
Chief Executive Mike Raybould said: “Although consumer markets are clearly tougher than 12 months ago, we continue to invest in our long-term strategy for sales and operating margin growth.
“Whilst retailer order flow in North America is currently challenging, our data clearly indicates that end customer demand remains robust, indeed is up on last year.
“Accordingly, it is important that we ensure that we maintain the investment in our capabilities in North America for when the short-term uncertainty subsides.
“Other key markets have performed in line with our expectations, and we remain confident that we are retaining market share gains made in recent years.
“We are pleased with our new product launches and the work we have done to grow operating margins which will benefit the Company in the medium and longer term.”
Portmeirion Group offers a wide range of homewares and reported a record sales year last year, partly down to increased productivity at its Stoke-on-Trent factory, as reported in Daily Focus here.
