Hallenstein Glasson warns 1H profit may fall 23 percent on slow sales

Friday 15th November 2013

Hallenstein Glasson, the clothing retailer, warned its first-half profit may fall by 23 percent with subdued sales in Australia and New Zealand.

The Auckland-based company is forecasting profit of about $8 million in the six months ended Feb. 1 from $10.4 million a year earlier, after first quarter sales were 7 percent down from 2012, it said in a statement. The retailer will give a further update at its annual meeting on Dec. 12.

"August and September were particularly challenging, but as the summer season has unfolded sales have been more in line with historic levels in both New Zealand and Australia," chief executive Graeme Popplewell said. "Although the major trading months of the first half are still ahead of us, given the slow start to the season it is unlikely that results for the half year ending 1 February 2014 will match those of the previous year."

Hallenstein's profit warning comes after government figures yesterday showed a slump in consumer spending on apparel in the September quarter, with retail sales of clothing, footwear and accessories sliding 6.8 percent in the three months ended Sept. 30, the biggest quarterly fall since the series began in 1995.

In September, the retailer reported an 11 percent drop in annual profit to $18.7 million, near the bottom of its guidance, as its women's wear Glassons unit faced margin pressures on both sides of the Tasman.

The shares rose 0.8 percent to $5 yesterday, and have dropped 4.6 percent this year. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters, with a median target price of $4.80.

BusinessDesk.co.nz

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