The Works Navigates Online Hurdles as Store Sales Grow
Shares in hobby retailer The Works experienced a sharp decline on Thursday morning, dropping by 8%, following the company's report of a slight dip in overall sales. This downturn was primarily driven by a significant 36% collapse in online trade over the half-year period, which managed to offset a much stronger performance across its physical stores.
Financial Performance and Operational Challenges
For the six months leading to November 2, the company announced that total revenues saw a minor decrease of 0.3%, settling at £123.8 million compared to the same period last year. However, a more positive metric, like-for-like sales, which compares sales from established stores, actually grew by 0.3%.
The dramatic fall in online sales, which account for under 10% of the group's total revenue, was attributed to significant "operational challenges". These challenges emerged during the transition to a new third-party fulfilment contract. The company confirmed that while actions have been taken to lessen the impact, it anticipates that higher costs and reduced online capacity will continue into the crucial festive trading period.
Store Success and Future Outlook
In a contrasting narrative, the retailer's physical shops delivered a robust performance. Like-for-like store sales increased by a healthy 4%, a boost the company credits to its ongoing turnaround strategy. The expansion of its physical footprint continued with two new store openings during the half-year, and a total of five new sites are planned by the end of the financial year.
Chief Executive Gavin Peck struck an optimistic tone despite the headwinds. He stated, "We are pleased with the progress made in the first half of FY26, having delivered a number of important strategic initiatives, a strong performance in-store and ongoing margin growth." He added that the company's focus on affordable, screen-free family activities is resonating with customers and that they are on track for further progress, notwithstanding the "challenging retail backdrop" and the ongoing online constraints.
The retailer also highlighted achieving record "Back to School" sales and expressed optimism for shoppers seeking affordable options in the upcoming Christmas season.
