Thursday 10th July 2008
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Net income will probably slide to NZ$15 million in the year ending August 1, from $21.3 million a year earlier, the retailer said in a statement. Sales have dropped 6% so far in the winter season
"There is fierce competition for consumers' wallets," chief executive Shayne Quanchi said. "Margins are being squeezed and every effort is being made to control stock levels."
Hallenstein joined retailers including Briscoe Group and Warehouse Group in cutting its forecast for earnings as soaring prices for food and fuel, and higher mortgage interest rates dent consumer confidence and spending. Most economists now say the economy fell into recession in the first half of the year and GDP may shrink this quarter as well.
Shares of Hallenstein have sunk by almost a third this year.
Quanchi said the current retail environment was the most challenging experienced for some years. Still, the company expects to end the year with its stock levels in "good shape," he said.
The company's full-year results will be released on September 24.
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