Majestic Wine – results reassure but the growing number of stores makes little sense to us
Interim results for the 26 weeks ending 29 September 2014 were broadly in line with what most had anticipated just ahead of the key Christmas trading period and there were some positive indications that MJW looks well placed to continue to take market share. However, the growth in number of stores relative to the declining per-store returns is clearly a concern.
Total group sales were up 2.8% to £133.8m with like for like sales in UK retail stores up 2.8% and active customers up 1.9% to 643,000 – increase in active customers is broadly in line with the percentage increase in new stores. Profit before tax declined to £8.5m (2013: £9.5m) due to previously announced investments in infrastructure, technology and consumer insights to support future growth - we support those as long as it’s not all…
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