Hallenstein confirms jump in profit on improved product mix

Monday 27th September 2010 1 Comment

Hallenstein Glasson posted a 53% jump in full-year profit after the clothing retailer improved its product offering and benefited from a stronger kiwi dollar, fattening its margin.

Net income rose to $19.6 million, or 32.83 cents a share, in the 12 months ended August 1, from $12.8 million, or 21.46 cents a year earlier, the company said in a statement today. Sales rose 4.5% to $207.1 million. The company first flagged the results on August 6.

The retailer did less discounting than in the previous year, especially at its Glassons New Zealand women’s apparel chain, which it put down to improved buying and a better clothing range. Group sales in the first seven weeks of the current year are 5% ahead of the same time last year though the retail environment is tough, the company said.

“The retail environment remains challenging and we don’t see any significant improvement in the near term,” said chairman Warren Bell.

“The momentum achieved over the past year will be very difficult to maintain.”

“The opportunity to further improve sales and margin on the existing business base will be far more challenging,” he said.

The company will pay a final dividend of 17 cents a share, up from 11 cents a year earlier. Hallenstein shares have climbed 23% this year, outperforming the benchmark index, which sank 2%.

Shares of the retailer are rated ‘hold’ based on the consensus of four recommendations compiled by Reuters. The stock was unchanged at $4.12 in trading on Friday.

The company benefits from a stronger New Zealand dollar because it sources clothing in China. In the previous year, the kiwi dollar spent some six months trading below 60 US cents while in the latest 12 months it ranged from 66.15 cents to 75.6 cents.

Sales at the Hallenstein chain rose 4.9%, or 3.9% on a same-store basis, it said.

Glassons New Zealand reported a 1.7% increase in revenue, or 2.6% for stores open at least 12 months. Glassons Australia lifted sales by 5.2% in Australian dollar terms and the business contributed to group profit for the first time with pretax earnings of $1.5 million compared with a loss of $1.3 million a year earlier.

Hallenstein said it will give a further update at its annual meeting in early December.

Businesswire.co.nz

Comments from our readers

On 27 September 2010 at 9:35 pm B.Riddell said:

As a exporter (Fonterra supplier)I will have to buy Hallensteins to get back the dollars lost buy a strong NZ$,A case of interfering Government in the market place