SYDNEY — Australia’s Premier Investments Ltd. has posted a slight rise in half-year net profit in a challenging domestic retail environment, buoyed by strong results in its fashion stationery and premium sleepwear divisions.
For the 26 weeks to January 28, the Melbourne-based retail group posted a net profit after tax of 71.9 million Australian dollars or $54.1 million at average exchange for the period, up 0.46 percent, while group underlying net profit before tax was 100.6 million Australian dollars or $76 million up 9.7 percent.
Group sales were 594 million Australian dollars or $447 million, up 4.3 percent.
The Premier Retail division’s sales rose 7.1 percent to a record 588.6 million Australian dollars or $443 million.
Underlying earnings before interest and taxes rose 10.6 percent to a record 93 million Australian dollars or $70 million, in line with guidance.
Underlying EBIT margin was up 50 basis points to 15.8 percent.
Underlying profit before tax rose 10.8 percent to a record 90.9 million Australian dollars or $68 million.
Like-for-like sales were up 2.1 percent on a constant currency basis, following record H1 2016 like-for-like growth.
Online sales rose 48 percent — almost seven times greater than the overall 7.1 percent growth in Australian online fashion retail sales in the 12 months to January 2017, as tracked by the National Australia Bank’s Online Retail Sales Index.
Significant negative events over the period include an unseasonably cold October; the closure of four stores in July in Hobart, Tasmania, following the collapse of a retail arcade due to structural damage; and November’s earthquake in Wellington, New Zealand, which saw the temporary closure of 26 stores over the key Christmas quarter.
Although four of Premier Retail’s seven brands saw low- to midsingle-digit sales declines over the half, the streetwear chain Just Jeans saw 4.7 percent sales growth to 114.3 million Australian dollars or $86 million, while premium sleepwear brand Peter Alexander’s sales rose 13.8 percent to 99.4 million Australian dollars or $75 million.
Global sales at children’s fashion stationery brand Smiggle, the group’s star performer, rose 26.4 percent to 134.7 million Australian dollars or $101 million. Smiggle’s sales have grown 81 percent in two years.
“These results were achieved in a half that saw several Australian discretionary retailers go out of business whilst others have reported [a] significant decline in earnings” said Premier Investments Chairman Solomon Lew.
“We are relentlessly focussed on implementing our strategies — investing in expanding Smiggle globally, growing Peter Alexander significantly and delivering a world-class online experience for our customers, while achieving ongoing cost efficiencies and continuing to invest in our core apparel businesses” said Premier Retail chief executive officer Mark McInnes.
Smiggle opened 26 new stores in the U.K. and seven in Asia over the period and is poised to test market the Eurozone in H2 via two new stores in the Republic of Ireland.
Smiggle operates 272 stores in Australia, New Zealand, Singapore, England, Scotland, Wales, Malaysia and Hong Kong, with almost 60 percent of sales now from international markets.