Coats Group PLC (LSE:COA) said widespread running down of stock levels by clothing and footwear manufacturers led to a 20% decline in organic sales of its threads and shoe components in the first four months of 2023.
However, this was in line with expectations, the FTSE 250-listed group said, and its full-year guidance remains unchanged.
On a reported basis, Coats revenues were down 12% in the period, with the Footwear business up 58% after first-time contributions from acquisitions Texon and Rhenoflex.
Apparel was down 27% as customers destocked reflecting an adjustment to more subdued consumer demand and excess inventory levels
Looking forward, Coats said it still expects a second-half weighting, underpinned by the contributions from acquisitions, associated synergies and strategic projects.
For the medium-term, the company said it is “very well-positioned in its markets, as the global partner of choice for winning brands and with a clear leadership position in innovation and sustainability”.
In response, Coats shares fell 1.4% to 72p in early trading.