Briscoe cedes some gross margin in first quarter to boost sales

Briscoe Group, which reported yet another record profit in March, gave up some margin in its homeware chain to boost sales in the first quarter. 

Revenue rose 6.3 percent to $133 million in the three months ended April 30 and gained 5.8 percent on a same-store basis, the Auckland-based company said in a statement. Briscoe opened two Rebel Sports outlets and a Briscoes homeware store in the period, while closing one Briscoes store, one Rebel Sports shop, and two Living & Giving outlets. 

Managing director Rod Duke, who owns more than three-quarters of the company, said the retailer ceded some gross margin in its homeware division to "increase sales momentum" whereas the sporting goods division was tasked with locking in rapid growth in recent years. Homeware sales rose 8.8 percent in the quarter to $86.5 million while sporting goods sales edged up 2.6 percent to $54.8 million. 

"We are satisfied with the positive sales and profit growth achieved for the first three months of our financial year," Duke said. "Inventory is in good shape, costs have been well controlled and our online business continues to show significant growth in sales and profitability."

Briscoe boosted annual profit 26 percent to $59.4 million in the year ended Jan. 29, widening margins in a retail environment where rival companies have typically struggled to adapt to changing consumer behaviour. That marked the retailer's seventh year generating a record profit. 

The shares were unchanged at $3.85, and have slipped 4.5 percent so far this year. 

(BusinessDesk)