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Briscoe lifts 1Q sales 5.9 percent , offsetting thinner margins on competition, late winter start

Friday 3rd May 2013

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Briscoe Group, the homeware and sports goods chain controlled by managing director Rod Duke, lifted first-quarter sales 5.9 percent, helping offset weaker gross margins caused by increasing competition among retailers and a late start to winter.

Sales rose to $108.6 million in the three months ended April 28, the Auckland-based company said in a statement, with a 5.5 percent lift in homeware and a 6.6 percent gain in sports goods. The increased sales and tight cost controls left the retailer's net profit in line with a year ago, even as margins were squeezed by the tough retail market and unseasonally dry and warm start to the year.

"A strong sales performance has mitigated some of the downside impact in margin caused by the long warm summer and therefore the very late start to our winter category sales," Duke said.

"We have matched last year's bottom line performance for the first three months, which given the extraordinary weather conditions and the continued competitiveness and unpredictability of the retail market, we believe is a satisfactory start to the financial year," he said.

Government figures last month showed increasing discounting among retailers was one of the key ingredients in keeping the annual pace of inflation at 0.9 percent, just below the Reserve Bank's target band of between 1 percent and 3 percent.

That discounting helped some retailers boost their sales, with Briscoe and clothing chain Hallenstein Glasson both reporting gains through the period.

Briscoe said same store sales were 3.4 percent ahead of the same quarter a year earlier, led by a 5.3 percent increase in sporting goods and a 2.4 percent gain from its homeware chains.

In March, Briscoe reported a record annual profit of $30.5 million in the 2012 financial year, allowing it to lift its total dividend paid to 11 cents per share.

The shares, of which Duke owns 78 percent, were unchanged at $2.53 today, and have climbed 16 percent this year, valuing the retailer at $543.5 million.

BusinessDesk.co.nz

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