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Hallenstein Glasson maintains sales momentum; beats annual earnings guidance

Friday 27th September 2019

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Hallenstein Glasson Holdings sales accelerated in the first two months of the new financial year, having beaten its annual profit guidance on the strength of its Glassons womenswear chain. 

The clothing retailer said sales were up 7.2 percent in the first eight weeks of the 2020 financial year, with its Hallenstein Brothers menswear chain recovering from flat sales and a drop in profit, and as its Glassons chain reported steady growth. 

The company said net profit was $29 million in the year ended Aug. 1, up from $27.4 million a year earlier, and beating guidance of $27.7-28.2 million. Sales rose 3.4 percent to $287.6 million. The bottom line was bolstered by a $1.1 million gain on the sale of its Lambton Quay property, which helped offset a skinnier gross margin of 60 percent compared to 61.3 percent a year earlier. 

"With the recovery of Hallenstein Brothers in New Zealand underway, and with the consistent growth of Glassons in both markets, the focus on the key strategies of speed to market, customer service and investment in digital will continue," managing director Mary Devine said. 

"However, there remains margin pressure caused by the NZD/USD exchange rate and we are cognisant of the key trading months ahead and the challenging market environment." 

Glassons New Zealand was the main contributor to earnings, generating a profit of $11.4 million on sales of $100.7 million, up from a profit of $10.6 million on sales of $96.9 million a year earlier. The Australian arm lifted sales 14 percent $89.5 million, although profit was largely flat at $8.1 million. 

Hallenstein profit fell 19 percent to $7.2 million with revenue edging up 0.3 percent to $97.3 million. 

Devine said the retailer continued investing in its digital offering, with online sales now accounting for 15 percent of total sales. That's up from 12.8 percent a year earlier, and is a higher ratio than other listed retailer Briscoe Group's 11 percent, Kathmandu Holdings' 10.1 percent and Warehouse Group's 7.8 percent. 

The board declared a final dividend of 24 cents per share, payable on Dec. 17 to those on the register on Dec. 10. That takes the annual payment to 44 cents, unchanged from a year earlier. 

The shares rose 1.7 percent to $6.They have climbed about 44 percent so far this year, outpacing a 19 percent increase on the S&P/NZX All Index during the same period. 


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