Just Group cuts profit forecast, notes NZ pressure

Wednesday 2nd July 2008

Just Group, the Australian retailer that operates the Just Jeans and Jay Jays clothing chains, cut its full-year earnings forecast on a dip in consumer spending.

Earnings per share will be between 29.2 Australian cents and 30.6 cents, the Melbourne-based company said in a Statement. It had previously forecast earnings of 33.4 cents a share in its response to a hostile takeover.

Just Group continued to reject the A$809 million takeover offer from Premier Investments Ltd after first pooh-poohing the proposal last month. Premier is controlled by Australian rich-lister Solomon Lew.

"Consumer spending has been weaker than was anticipated at the time of the target's statement," said Ian Pollard, Just Group's chairman. "Just Group has experienced a weaker than expected end-of-season sales period in Australia and further pressure on sales in New Zealand."

The comments on New Zealand reflect a survey this month showing consumer confidence tumbled to a 17 year low in the June quarter. In Australia, the Westpac-Melbourne Institute Consumer Sentiment Index fell 5.6% in June from May, and was 30.3% below the same month a year earlier.

The company said sales and gross margin had been hurt at its outlets, especially for Just Jeans and Jay Jays.

Shares of Just Group fell 13% to A$2.81 on the ASX.

By Jonathan Underhill

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