Shares of clothing firm Supreme (AIM: SUP) are trading higher in the early part of the Monday session after the company released a trading update in which it said performance in the first half of the year had been strong.
Supreme said it remains confident in achieving expectations for the full year after a solid performance during the 6 months ended 30 September 2021.
Helping to drive the company's growth is its momentum in its vaping division, which has delivered positive growth alongside Supreme's Sports Nutrition and Wellness category.
Lighting has benefitted from some brought forward sales and the expected organic growth, while batteries continue to be a defensive and predictable profit contributor for the business.
Manufacturing in the company's vaping and sports nutrition categories is in-house, which has meant it has been relatively unaffected by the global supply chain issues affecting other areas of the economy. In addition, Supreme's active management in its Batteries and Lighting divisions has also largely insulated Supreme from these issues.
“Management remain cognisant of supply chain and labour constraints but are confident of being able to manage these risks in-line with the growth the Group is delivering,” the company stated.
“Overall, group margins have been particularly strong with significant year-on-year growth in profitability. Whilst it is too early to draw conclusions about the full year, the Board is pleased with the performance of the Group and looks ahead with confidence,” added the company.
Supreme said it will report its interim results for the 6 months to 30 September on 7 December.
The company's shares have been boosted by the update, currently trading at 7.73%.
Supreme shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are SUP shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.