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Briscoe reiterates forecast profit drop as sales slide

Tuesday 4th November 2008

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Briscoe Group reiterated its forecast for a drop in full-year profit after difficult trading conditions weighed on the retailer's third-quarter sales.

Second-half profit would be below last year's $11.9 million, managing director Rod Duke said in a statement today. Sales in the 13 weeks ended October 26 fell 11% to $77.8 million.

The operator of the Briscoe homeware, Rebel sports goods, Urban Loft and Living & Giving chains posted a 71% slump in first half profit. A pick-up in the second half means the full year earnings won't fall as much as the profit decline in the first six months of the year implies, Duke said.

Shares of Briscoe were unchanged at 80 cents, keeping their decline in the past six months at 35%. Like rival retailer Warehouse Group, trading at Briscoes has been hampered by weak consumer sentiment and rising costs for fuel and food, which left households with less to spend on discretionary items. Still, the price of fuel has tumbled from its July high and food costs are abating.

"Our August and September results were poor but we were reasonably satisfied with a more buoyant October performance," Duke said. The timing of Labour Day had also impacted on sales in the third quarter, the company said today.

The performance in the second half also is dependent on trading through the crucial Christmas period, Duke said.

Homeware sales fell 10% to $53.1 million in the latest quarter and sporting goods sales dropped 13% to $24.7 million.

By Jonathan Underhill

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