British home shopping company Studio Retail Group (SRG) has reported that its sales in the third quarter (Q3) of the fiscal year 2022 (FY22) dropped by 10% compared to the same period of the previous year.

The company’s cumulative performance for the first 39 weeks of FY22 was down by 5% year-on-year.

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In its trading update, SRG said that product sales in the eight weeks prior to its Interim Results announcement on 25 November dropped by 21% compared with the corresponding period of FY21.

Despite this, sales increased in the remaining five weeks of the quarter, increasing by 9% against Q3 2020.

Compared with the same period two years earlier, SRG’s sales increased by 18% in the quarter, taking the company’s total growth for the first 39 weeks of the year to 28% against FY20.

During the quarter, SRG’s total active customer base dropped by 2% to 2.3m from a year earlier and increased by 23% compared to two years prior.

The company said that it would aim to sell unsold stock from its continuity ranges throughout this year, which had arrived late due to supply chain issues.

SRG CEO Paul Kendrick said: “The fundamentals of Studio’s business model are solid, notwithstanding the market challenges that have been exacerbated by our over-commitment to stock in the near term. 

“The trading performance over Christmas, with sales up 18% over two years, shows our offer is resonating with a customer base of 2.3m.

“We will continue to drive the long-term profitability and success of the group.”

SRG said it expects ‘normal’ trading conditions in the fourth quarter, assuming no further Covid-19 lockdown restrictions will be introduced in the UK.

For the full year, the company expects its adjusted profit before tax to be between £28m ($37.6m) to £30m ($40.2m).

SRG is also considering several options to fulfil a short-term working capital funding requirement, with the company currently having a fully drawn revolving credit facility of £50m.