Children's clothing chain Pumpkin Patch says full-year profit may drop as much as 35 percent in the face of intense competition in Australia, becoming the second local retailer this month to cite tough times across the Tasman. The shares tumbled to a 16-month low.
Profit after tax, excluding reorganisation costs, is expected to be $7.5 million to $9 million in the 12 month as ending July 31, down from $10.1 million a year earlier.
While trading in the winter season had been tracking to expectations, over the last five weeks there had been "a significant increase" in promotions, with major retailers "entering end of season sales much earlier and far more aggressively than normal", the company says.
"This will impact retail earnings for the remainder of the FY13 financial year."
Pumpkin Path shares fell 8.1 percent to 79 cents. The shares are rated a 'hold' based on the consensus of four analysts polled by Reuters, with a median price target of $1.35.
The retailer's earnings were also hurt by changes to delivery schedules by its wholesalers, with a number of deliveries typically made in July being put back to August and September.
"These changes are only timing in nature, however full-year after tax earnings for the international business unit will be impacted by $600,000," it says.
The profit warning comes two weeks after clothing retailer Hallenstein Glasson Holdings said full-year profit may drop as much as 12 percent after a slow start to winter hurt returns from its Glasson stores in Australia, where rivals have cut prices aggressively.
Earlier this month, Australian government figures showed retail sales rose 0.2 percent in April, missing estimates of 0.3 percent. That followed a 0.4 percent decline in March.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Light rail the winner in latest Auckland Transport turnaround
- Companies Office rejects NZ First complaint over Silver Fern deal
- MARKET CLOSE: Shares rise as investors seek stability; Spark, Precinct Properties, Summerset up
- New data series shows 5.2% of NZ households owe more than they own
- Key goes against NBR readers, conservative UK, Australian governments, corporate NZ on 'Google tax'
Most listened to
- BNZ's Jason Wong says the movements in the currency market last week were some of the biggest in history
- CBL's Peter Harris on uncertain times in the UK insurance industry
- Govt performing an awkward political U-turn on foreign trusts. Rob Hosking with John Shewan and John Key
- Trade Minister Todd McClay says plans for an FTA with the EU will not be hindered by the Brexit
- Oxford University academic Malcolm McCulloch predicts the imminent death of the internal combustion engine