Business Overview
Superdry Plc (LON: SDRY) is an apparel brand with the main focus on providing good quality products. The company’s products use British style with a mix of Americana and Japanese inspired graphics. The company’s products are known for its quality fabrics, exclusive detailing, authentic vintage washes, hand-drawn graphics and custom fits for unique styling.

Trading and Covid-19 Update
On 18^th March 2020, Superdryreleased an update trading performance and impact of Covid-19 on business performance. Currently, the company is facing unprecedented challenges arising from coronavirus (COVID-19);  the trading is expected to be significantly impacted by such measures. Accordingly, the group is no longer giving a formal outlook in relation to the financial year 2020. After the international outbreak of coronavirus, the store estate was estimated to generate in the range of £5-£6 million in sales per week for the rest of the fiscal year 2020. Presently, 78 stores are affected by government-mandated closures across Europe. In the US and the UK, stores stay largely open, but footfall has been marginally impacted, decreasing on an average ~25% week on week, as customers and governments take increasing measures to contain the spread of the coronavirus virus. These main markets signify ~50 per cent and 10 per cent of weekly sales predictions, respectively. The company do not anticipate the decrease in sales from the retail stores to be fully mitigated by sales through the e-commerce channel, which stays fully open for business. While the group is also pursuing cost-saving measures across the business. The company has a robust position of 47 million pounds of net cash on the balance sheet.

Share Price Performance

Daily Chart as of April9^th, 2020, after the market close (Source: Thomson Reuters)

Superdry Plc shares closed at GBX 170.00 at the time of writing after the market close on 9^th April 2020. Stock's 52 weeks High is GBX 534.64 and Low is GBX 60.10.

Valuation Methodology

*Peers: Ted Baker Plc, Lookers Plc, Halfords Group Plc and Joules Group Plc.

Conclusion
The group’s performance during the 10-week to January 04, 2020, was significantly lower and full-year performance is expected to be below than the market expectations as well. The company’srevenue for the current period has declined as compared to the corresponding period of the last year’s performance, and the profitability margins have remained stagnant or declined. The uncertainty over the Brexit will impact the group’s business performance. As the company operates worldwide,their financial performance can be dented with the fluctuations in the exchange rate and can also lead the company towards legal and regulatory risks. The company expect the financial performance to reflect the historic issues inherited with uncertain market conditions in the financial year 2020. The outbreak of COVID-19 has impacted the business performance of the company due to closures of its stores.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the closing price of GBX 170 (as on 9^th April 2020), while we look for any upcoming catalysts in the near term.

*All forecasted figures and peers have been taken from Thomson Reuters.

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