Christmas cheer boosts Hallenstein Glasson earnings

Clothing retailer Hallenstein Glasson has lifted its half-year earnings guidance 25%, thanks to record Christmas sales.

Sales for the six months to February 1 had grown $7.85 million or almost 8% to $108.56 million, Hallenstein said in a trading update this morning.

Net profit for the half-year is now projected to be in the $8.7 million to $9 million range --  25% higher than the same time last year.

Hallenstein Glasson chief executive Graeme Popplewell said a bumper Christmas and a strong January had underpinned performance in the New Zealand market, where sales for its Glassons, Hallensteins and Storm stores were up 8%, 5% and 7% on a same-store basis.

Sales had also improved in Australia where market share was being won in a competitive environment. Mr Popplewell said.

“However there is still some way to go in Australia before we can return a level of profitability acceptable to the board,” he said in the trading update.

Mr Popplewell warned it would be difficult to continue the upwards earnings momentum over the balance of the financial year, as shoppers remained hungry for a bargain and pressures remained on store rents.

“A consumer conditioned to paying less than full price, rising rents, wages, and the increased cost of goods from China in particular will present us with some real obstacles to overcome moving forward,” said Mr Popplewell.

Hallenstein Glasson’s store portfolio would be reviewed as shopping centre landlords continued to raise rent in excess of the CPI -- making specialty retail a marginal proposition in some centres.

Focus would also be given to its digital stores as online sales were expected to become a bigger part of the business.

Shares in Hallenstein Glasson last traded at $3.55.


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