Briscoe third quarter sales rise as aggressive promotions squeeze margins

Briscoe Group lifted third-quarter sales 8.4% after spending more on campaigns to woo customers, putting a squeeze on the retailer's margins.

The company generated $125.6 million of revenue in the 13 weeks ended October 30 from $115.9 million a year earlier, with sales at it homeware stores up 7.2% to $79.1 million and sales at its sporting goods stores rising 10% to $42.1 million, it said in a statement. That was bolstered by the opening of three new stores in the period, and on a same-store basis homeware sales increased 4.6% and sporting goods rose 6.9%.

Briscoe managed to widen its gross margins in the first half of its financial year to 40.5% from 38.9% a year earlier with more rigorous inventory management combining with increased sales to drive up profit, though its need to compete more aggressively meant its third-quarter margins shrank in the latest period. Still, the company expects annual profit to "substantially exceed" last year's record $47.1 million.

"We expect gross margin%age to remain under pressure for the balance of the financial year from the continuation of aggressive promotional activity and also the impact of hedged foreign exchange exposures taken across the last 12 months at less favourable rates than those available currently," managing director Rod Duke said. "As we begin the crucial final quarter we remain optimistic in our outlook."

Briscoe's year-to-date sales were tracking at $393.9 million, up 9.5% from a year earlier, with homeware revenue increasing 7.5% and sporting goods sales up 13%.

The shares, of which Duke owns about 78%, were unchanged at $3.65, up 31% this year.

(BusinessDesk)

Paul McBeth
Thu, 03 Nov 2016

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Briscoe third quarter sales rise as aggressive promotions squeeze margins