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Briscoe lifts 3Q sales but performance still patchy

Friday 5th November 2010

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Briscoe's third-quarter sales rebounded strongly after a weak second quarter but the company says performance is still patchy.

The homeware and sporting goods retailer's sales rose 6.51% to $89.8 million in the three months ended October 31 with same-store sales rising 6.1%. Second quarter same-store sales fell about 2%.

Its flagship Briscoe's homeware stores lifted sales 6.2% to $61.5 million in the third quarter while the Rebel Sport stores' were up 7.3% at $28.2 million. The company closed two Living & Giving stores in the three months in Christchurch and Newmarket after their leases expired and now has 88 stores.

Sales for the nine-months were up 3.8% to $279.9 million.

“This third quarter certainly started better than it finished,” says managing director Rod Duke. Solid sales and gross profit in August and September put the bottom line results strongly ahead of the same two months last year.

That was despite the impact of the Christchurch earthquake and the results were boosted by a significant late rally in sales leading up to the October 1 increase in GST, Duke says. “During October, however, we have experienced further tightening of sales and margin.”

Duke says he is “cautiously optimistic” about the crucial final quarter, hoping cuts in personal taxes will boost sales. “However, the extent to which this is offset by increases in fuel, power and general living costs remains to be seen.”

He says he remains confident annual net profit, excluding a $2.6 million tax charge as a result of changes to the depreciation rules, will be ahead of the $21.03 million reported for the previous year.

“This will, of course, be heavily influenced by the strength or otherwise of the retail market over the Christmas period.”

Briscoe reported an adjusted first-half net profit of $9.3 million, up 42.3% on the previous first-half, boosted by cost-cutting.

Briscoe shares closed yesterday at $1.43, their highest level since January 2008 and well up on their 12-month low of $1.11.

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