“full-price discipline” drove a “significant” improvement in the quarter’s trading gross margin.

The company said on Thursday that the 52 weeks to April 24 saw group revenue falling 21% to £556.6 million. But in Q4, revenue rose 0.8% to £118.3 million.

That improvement was helped by e-commerce and wholesale, with store revenue continuing to be weak as shops remained closed for much of the period.

Store revenue fell 50.9% to just under £141 million for the full year, but it fell a wider 51.5% to 14.3% in Q4. That came as the company lost 69% of its store trading days due to Covid restrictions, compared to 42% of trading days lost in Q4 of the previous year.

Meanwhile e-commerce rose 33.8% to £202.9 million in the full-year and increased 26.6% to £14.9 million in Q4. But the big difference between the 12 months and the three-month period was in wholesale. This fell 19.9% to £212 .8 million in the year, but rose 13.5% to £63.1 million in the quarter.

CEO Julian Dunkerton said: “Our strengthened e-commerce presence has helped mitigate the impact from enforced closures of our stores. We returned to revenue growth in Q4, and our commitment to a full-price stance over the period has seen significant online margin improvement. Our liquidity remains strong, with closing net cash ahead of last year and our facilities remain undrawn.”

Clearly, the company was hit hard by continued Covid-19 disruption throughout the year, but Q4 does seem to offer some hint that a recovery has started.

And key initiatives seem to have gone well. For instance, the company said the Neymar Jr organic cotton campaign has launched globally and “resulted in record engagement rates through rigorous targeting, with two million engagements in the first three weeks across our owned channels”.

And it has seen “encouraging trade” since the reopening of its owned stores in the UK “with the initial run rate ahead of like-for-like trading through FY21”. However, “EU trading remains suppressed due to continued restrictions”. As of May 3, some 27% of the firm’s store estate was closed, although this was much better than the 81% that was shut a year ago.

But also on the stores front, the company has renegotiated a further 48 leases and in FY21 achieved a weighted average saving of 52% in addition to substantial one-off Covid-related rent waivers.
 
Clearly the situation remains uncertain so the company refrained from giving concrete guidance for the year ahead. But it said it’s “confident of growth in FY22 revenue and profitability compared to FY21, assuming no further material national store lockdowns and a continuing recovery in footfall and consumer demand through the period”. 
 
Profitability will be supported by higher gross margins from its “restored full-price discipline and positive operating leverage from reduced store costs, partially offset by the end of government support and our ongoing brand marketing investment”.