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Childrenswear retailer Pumpkin Patch has announced a net profit of $8.1 million for the six months ended January 31, 44% down from the same period last year.
The company says it continued to face “challenging trading conditions across its markets” leading to a 10% decline in total group revenue to $173.9 million.
While the markets were characterised by high levels of promotional activity Pumpkin Patch’s store level gross margins were not materially impacted, the company said.
However the lower sales result, a continued high New Zealand dollar, and the fixed nature of overheads across the business had a “deleveraging impact” on net earnings.
Retail sales were down in Australia by 14% in New Zealand dollar terms and 12% in New Zealand.
Pumpkin Patch saw some improvement in the United States: total US dollar sales were up 8% but in New Zealand dollar terms sales were up only 3% due to the impact of the high exchange rate.
During the first half the Company opened 17 stores across Australia, New Zealand, United Kingdom and its newest retail market Ireland.
Chief executive Maurice Prendergast said, “The softer retail market has meant the leasing environment is more favourable than what it was 2 or 3 years ago.
“Consistent with our longer term store roll out plans we will take advantage of suitable new store opportunities when they arise as long as they meet our normal stringent store selection criteria.”