UPDATE 1-Britain's Superdry sees profit wiped out as returning founder resets business

* Co-founder Julian Dunkerton returned to business in April

* Strategy focused on full price sales

* First half underlying pretax profit down 98.4%

* Revenue down 11%, expects "low single digit" fall in second half (Adds detail, CEO comment, shares)

LONDON, Dec 12 (Reuters) - British fashion retailer Superdry's first half profit has been all but wiped out as its new leadership addresses what it regards as the missteps of the previous management with a renewed focus on full price sales.

The group, now led by co-founder and CEO Julian Dunkerton following a boardroom coup in April, cautioned on Thursday that its turnaround would take two to three years.

Echoing comments from rival Ted Baker, which warned on profit on Tuesday, Superdry noted considerable risk over the peak trading period, with "highly promotional and competitive" market conditions.

"This is against a backdrop of continuing macroeconomic uncertainty, particularly from the (Dec. 12) UK election and Brexit, and so whilst we have started the third quarter with encouraging trading, we remain cautious on the outlook for the full year," it said, forecasting a "low single digit" decline in second half revenue.

Shares in Superdry, which sells sweatshirts, hoodies and jackets adorned with random Japanese text, were down 4.4% at 1034 GMT, paring gains over the last year to 35%.

Reversing a previous strategy Dunkerton, also the group's biggest shareholder with an 18.5% stake, is concentrating on full price sales and reducing promotional activity. That hurt revenue but is helping profit margins to recover.

The group made an underlying pretax profit of 0.2 million pounds ($256,600) in the 26 weeks to Oct. 26 versus 12.9 million pounds in the same period last year.

Revenue fell 11% to 369.1 million pounds, though the decline moderated through the six months and subsequently into the peak trading period. It recorded its strongest online Black Friday day ever.

A total underlying gross margin increase of 250 basis points was offset by a 180 basis points foreign exchange hit and stock accounting changes of 80 basis points.

Dunkerton's strategy is to restore the Superdry brand to its design-led roots after the company issued a string of profit warnings under its previous management.

His initial focus has been on getting product ranges right and improving e-commerce. He has increased the number of products sold online and put more stock into stores.

He said stock options in large stores were 1,578 in September but would rise to 4,000 by September 2020.

"There is huge momentum now building, having a consistent full price message," he told Reuters.

Dunkerton has a contract as CEO until April 2021 but said he could stay longer.

"That's a minimum...I have no intention of leaving when it's up through a half done job, and as long as the company's happy with me I shall be staying," he said.

Superdry reported a statutory pretax loss of 4.2 million pounds, reflecting charges relating to accounting estimates for inventory and debt recoverability. ($1 = 0.7794 pounds) (Reporting by James Davey; editing by Sarah Young, Kirsten Donovan)