Moving its call to ‘hold’ from ‘buy’ Jefferies said the recently-published first-half results were not as solid as they first appeared.
In a note to clients, it said underlying earnings (EBITDA) from the owner of the JD Williams, Simply Be and Jacamo brands were boosted by a “material financial services one-off”.
At the same time “product revenue trends” are slowing and gross profit margins are set for “further declines”.
As a result, Jefferies’ analysts took out the red pen to lower its full-year 2023 EBITDA estimate by 11%.
The shares fell 4.3% to 43.96p. The bank slashed its price target to 50p from 95p.