When the heat is on plan ahead.

(From Financial Director)

FDs searching for the perfect reason for a profits warning might need to look no further than the tropical heatwave that blasted Britain in August. Some companies are citing temperatures that touched 100 degF as reasons for reduced sales. ScS Upholstery warned that profits could be lower because "the record-breaking weather ... has had an inevitable effect on trading". As the thermometer climbed, people were more interested in buying a garden lounger than a new sofa, writes Peter Bartram.

Collins Stewart, ScS's broker, cut its pretax profit forecast from GBP11.8m to GBP11.3m. ScS's shares fell 6% following the announcement.

Bakers Greggs, which has a chain of 1,200 shops, said its like-for-like sales were up only 1.5% in the first seven weeks of its second-half. This compared with a 4.7% rise in the first-half. The first seven weeks included the hot period in July and August. People prefer licking an ice-cream than munching sausage rolls in a heatwave. But when the weather became cooler, Greggs' like-for-like sales rise jumped back to 4.6%.

City analysts are expecting more profit warnings as autumn wears on.

While the early warnings were from retailers that experienced a sharp-end drop in sales as soon as temperatures rose, eventually lower sales work their way back up the supply chain to impact distributors' and manufacturers' bottom lines. It is hardly surprising that FDs are looking at how to factor weather into their financial planning. What's made this a real possibility now is the ...