Hallenstein Glasson has slightly exceeded its guidance with a $8.5 million interim profit, but sales have got off to a sluggish start in the second half of the year.
The clothing retailer's 55.9% jump in net profit for the six months to January was ahead
Hallenstein Glasson has slightly exceeded its guidance with a $8.5 million interim profit, but sales have got off to a sluggish start in the second half of the year.
The clothing retailer’s 55.9% jump in net profit for the six months to January was ahead of the guidance of $8.1 to $8.4 million given earlier this year, while revenue was up 6.9% to $102.3 million.
The profit rise was attributed to a 7% increase in turnover, stronger gross margins and a tight control on stock levels.
Losses in Australia last year also reversed to a modest profit for the period.
But there are still signs of general uncertainty in the retail sector with sales in the first seven weeks of the second half down 2%, although the company has kept its margins above last year’s levels.
The company cautioned against reading too much into these figures, with strong discounting last year.
It said while it was too early in the season to make any prediction on the winter season results, the retail environment was “reasonably stable” and consumer confidence is at a stronger level than last year.
While a significant improvement on last year’s results, the interim profit is still well below that seen in 2008.
Chairman Warren Bell said the improved profit was a “soil step” towards reaching the profits seen before the recession, with stocks currently at comfortable levels and a strong balance sheet.
“Strong trading over the Christmas period and early January cemented what had been a steady improvement during the period.”
While capital expenditure on store developments shuddered to a halt during the downturn, the company was now in the process of rolling out refurbished stores, with new look Glassons opening in Palmerston North and at Riccarton Mall this month.
