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Hallenstein shares jump 7.5% on first-half profit guidance

Wednesday 13th February 2019

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Hallenstein Glasson Holdings appears to have had a better than expected Christmas, with first-half sales up 3.1 percent and net profit expected to be about 6 percent higher.

The clothing retailer says sales for the six months ended Feb. 1 were $151.2 million, up from $146.8 million in the same six months a year earlier.

It expects net profit for the six months will come in at $15.7-16.2 million, up from $15.1 million the previous year.

Hallenstein shares jumped 31 cents, or 7.5 percent, to $4.45 after the announcement. The shares are barely changed from a year ago and have fallen from as much as $6.35 last August.

In December, Hallenstein warned it might face a margin squeeze in the six months just passed amid tough trading conditions in both New Zealand and Australia.

The company, which owns the Hallensteins menswear and Glassons womenswear chains, cited increasing costs, including fuel, freight and electricity, as well as the lower New Zealand and Australian dollars as putting pressure on trading margins.

Chair Warren Bell told the annual meeting the company would focus on improving market share and customer experience at the same time as keeping tight control over operating costs.

Today, Hallenstein said in a brief statement that its balance sheet “remains strong and stock levels continue to be well controlled.”

Hallenstein has often been called “the best in the business” as far as running its activities, but has never been particularly good at communicating with shareholders.

It reported a 58 percent increase in annual net profit last year after selling its unprofitable Storm womenswear retail chain and imposing stricter cost controls.

After a number of subdued reports from retailers about the often crucial Christmas-New Year trading period, figures from Stats New Zealand showed that core retail credit and debit card spending rose a seasonally adjusted 2.2 percent in January, reversing the 1.7 percent decline reported in December.

(BusinessDesk)



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