Postie Plus sales rise 4.3%, putting retailer on track to meet target of annual profit growth

Thursday 27th May 2010

Postie Plus Group, the Christchurch-based clothing retailer, posted a 4.3% gain in third-quarter, putting it on track to lift full-year earnings provided the remainder of the financial year plays out as expected.

Sales rose to $26.5 million in the three months through April, from $25.4 million in the same period of 2009, the company said in a statement today. Shares of Postie Plus rose 5.7% to 37 cents. The stock is down 12% this year, under-performing the NZX 50’s 8% decline.

Chief executive Ron Boskell said he anticipates tough competition for sales in the final quarter as retailers look to shift winter stock to make way for the new season. Demand for winter goods has been hampered this year by a mild, dry autumn, which hurt sales at retailers including Warehouse Group.

“For the first time this financial year we saw our sales momentum slow down, which we believe reflects the impact of the economy on the retail environment, particularly during the month of April, Boskell said. Despite expectations of a tough final quarter, the retailer expects “no significant stock overhang at year end and we continue to control this positive position diligently.”

The company had net income of $615,000 in 2009, a turnaround from the previous year’s $10.9 million loss, when weak consumer spending, shrinking margins and one-time costs related to the sale of its unprofitable Arbuckles outlets pushed it into the red.

Postie Plus expects to open two new stores in the fourth quarter, in Dannevirke and Waipapa, bringing the chain to 81 outlets.

The retailer “has continued to improve performance and protect margin in challenging market conditions,” Boskell said.

Businesswire.co.nz

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