Hallenstein Glasson, the clothing retailer dropped from the NZX 50 Index this month, posted a 40 percent decline in first-half profit as increased rivalry pushed down prices during the key summer season. It said early winter sales showed a glimmer of hope.
Net profit fell to $6.2 million in the six months ended Feb. 1, from $10.4 million in the year earlier period, the Auckland-based company said in a statement. That's in line with its January forecast for earnings of between $6 million to $6.3 million. Sales fell 8 percent to $106.4 million.
Hallenstein, which operates the Hallensteins, Glassons and Storm clothing stores in New Zealand and Australia, lost its place in the benchmark stock index following a 45 percent slump in its share price over the past year as it cut earnings guidance three times since June last year. The company said today that early figures for winter showed a "modest" improvement, with sales for the first six weeks about 2 percent ahead of the same period last year.
"We operate in a highly competitive environment which has, of recent times, been increasingly characterised by discounting and sale activity. Each chain in the group failed to execute the summer season to potential," chief executive Graeme Popplewell said in the statement. "There is still considerable work to do to ensure the business recovers earnings to historic levels but we are encouraged by results over the past few weeks."
Popplewell said the key winter trading months of May and June would be critical to achieving the company's earnings target for winter. He didn't provide further details.
Shares in Hallenstein advanced 0.7 percent to $3.02. The stock is rated an average "hold" according to analysts polled by Reuters.
Last month's appointment of Tracy Shaw to head Glassons was an important element in returning the womenswear chain to a "satisfactory performance", Popplewell said. Shaw replaces Di Humphries who left in October 2012 to head children's clothing chain Pumpkin Patch.
Hallenstein will pay 12 cents a share dividend on April 17, down from the year earlier payment of 16 cents.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Business Week in Review with Grant Walker & Andrew Patterson
- Matthew Hooton on what a National win in Mt Roskill could mean for Labour
- Tim Hunter on Sky's awkward Chinese problem
- Paul Goldsmith's attempt at insolvency law reform has been hijacked by a 'basked of deplorables' says Damien Grant
- First Retail Group's Chris Wilkinson on Pumpkin Patch's worsening situation