London-based online retailer CMO Group has announced that it expects its earnings to fall short of guidance due to lower average order values in the latter half of the year. The company projects adjusted earnings before interest, taxes, depreciation, and amortization for 2023 to be around £1 million ($1.3 million), a decrease from the August forecast of approximately £2.5 million and last year's £2.1 million.
CMO Group attributes this decline to economic challenges that have significantly affected the construction sector, particularly discretionary spending in the repair, maintenance, and improvement industry. While demand has remained resilient, consumers have shifted their focus towards smaller projects, resulting in a decrease in order values in late 2023.
Total sales for the year are expected to be in line with previous expectations at approximately £71.5 million, down from £83.1 million.
Despite a disappointing last quarter, CMO Group highlights successful achievements in key strategic areas such as product margin improvement and carriage cost control.
"Given the ongoing macroeconomic headwinds impacting the construction sector, we approach the outlook for 2024 with caution. However, we maintain confidence in our business model, strategy, and ability to achieve profitable progress," stated Chief Executive Dean Murray.
Written by Joe Hoppe