Women’s fashion brand Sosandar (LON:SOS) returned to strong revenue growth in FY26. This robust sales growth was generated despite a cyber incident that impacted retail partner Marks & Spencer (LON:MKS) and removed roughly £1 million of third-party revenue.
AIM-listed Sosandar also delivered record gross margins thanks to a shift away from discount-led trading. Investors welcomed news of a good start to FY27 too. Sales were up 22% to £11.6 million in Q1 despite a tough retail backdrop.
‘Trading with third-party partners continues to be strong, including M&S,’ insisted Sosandar, ‘with all partners trading ahead of the prior year.’
Adjusted profits double
Sosandar’s adjusted pre-tax profits doubled to £400,000 in the year to March 2026, in line with market expectations. Sales grew 14% year-on-year to £42.3 million. Strong growth through the firm’s own website and stores offset a broadly flat third-party performance depressed by the Marks & Spencer cyber incident.
Gross margin increased to a record 64% on reduced discounting and supplier consolidation. During the year, Sosandar remained one of the top‑selling brands across key partners including Next (LON:NXT). Encouragingly, trading with Marks & Spencer ‘gradually resumed’ following the cyber incident, while stock intake has returned to expected levels.
Delivering the goods
Co-CEOs Ali Hall and Julie Lavington commented: ‘We set out at the start of the year to demonstrate that we could return to strong revenue growth while maintaining margins and improving profitability, and we have delivered on all three.
‘This strong performance is testament to the strategic decisions we have made over the past two years, asking customers to return to full-price shopping and becoming a multi-channel retailer.’
Sosandar’s FY26 results are highly encouraging. They demonstrate that management’s decisions to prioritise margin expansion, profitability and cash generation while repositioning the brand as a full‑price retailer were the correct ones.
For FY27, Zeus Capital forecasts revenue of £47 million and a jump in adjusted pre-tax profits to £1.1 million. These estimates could prove conservative as Sosandar’s operational gearing may see earnings growth come through more strongly than expected.
Admittedly, Sosandar’s store estate remains loss-making. And these brick and mortar outlets will continue to drag on profitability until they mature. However, store performance is said to be ‘strengthening across the portfolio’. And management views stores as a brand showcase and a way to introduce Sosandar to new customers.
Sosandar is debt free with net cash of £8.4 million on the balance sheet. That means the company has the firepower for earnings-enhancing share buybacks and potential acquisitions.
Read the press release here: https://www.sosandar-ir.com/investors/
