High street arts and craft retailer The Works has reported weaker sales in 2024, leading to a slump in profit.
Adjusted earning before interest, tax, depreciation and amortisation fell by 30 per cent to £6m, from £9m last year, while adjusted profit before tax fell 39 per cent to £3.2m, from £5.3m in 2023.
The arts and crafts retailer delivered total revenue growth of £282.6m, up 0.9 per cent in the financial year. This was “against a challenging backdrop characterised by cost of living pressures and softened consumer demand”, the company said.
Store sales, which represented around 90 per cent of total sales, “continued to drive growth”, increasing by 0.6 per cent on a like for like basis.
Online like-for-like sales, in comparison, declined by 12.4 per cent, resulting in an overall sales decline of 0.9 per cent.
Sales were “lower than originally anticipated”, reflecting a “tough trading environment and operational challenges in the run up to Christmas”, the company said.
This, combined with increased cost headwinds, put “pressure on profitability”.
However, The Works said that cost-saving measures and improved trading in the final quarter mean that the company ended the year in line with expectations.
It added that sales in the first 21 weeks of the 2025 financial year have been in line with expectations, with like-for-like sales up 0.2 per cent.
The retailer said it was “well-positioned” heading into the peak Christmas trading period.
Gavin Peck, chief executive of The Works, said: “Against a persistently challenging consumer backdrop and tough Christmas trading, we were pleased to end full-year 2024 in line with market expectations.
“Good strategic progress was made during the year [and] work is therefore underway to refine our plans to transform the business and drive an improved performance and shareholder returns in the years ahead.
“Although consumer confidence remains subdued and we continue to face tough cost headwinds, the cost and operational action we have taken and the trajectory of recent trading means we are well positioned to offset these and return to profit growth in 2025.
“Operationally we are in a much stronger position this year as we head into the upcoming peak Christmas trading period and we look forward to supporting customers to have a Christmas well spent courtesy of The Works.”
The Works said it aimed to return to EBITDA margins of five per cent.