Retailer confident of passing its previous full-year profit prediction.
NZX and ASX-listed retailer Briscoe Group reported today that it expects net profit after tax (NPAT) to reach approximately $87 million, which is higher than the forecast range given in November of between $73.2m and $85m.
If achieve, the forecast would be a 20% increase from the previous year’s NPAT.
Managing director Rod Duke was not willing to provide more comment on the NPAT forecast until its full-year results are released in March.
The retailer, which operates Briscoes, Rebel Sport, and Living & Giving stores, published its full-year and fourth-quarter sales this morning for the 52 weeks between February 1, 2021, and January 30, 2022.
Full-year sales totaled $744.4 million during the year, an increase of 7.97% compared to the comparable period the previous year.
During the fourth quarter, between November 1 to January 30, sales grew by 4.97% in comparison year-on-year.
“Part of this year’s success has been our focus on ensuring the business has had sufficient inventory to satisfy demand," Duke said.
Supply chain uncertainty
With both national and international supply chain uncertainty due to Covid-19, Briscoe Group has tried to minimise disruptions by securing supply months ahead of when it normally would.
“This deliberate approach has resulted in a high level of inventory being carried during the year and we expect this to continue throughout 2022, but it has unquestionably delivered in terms of sales and profit," he said.
Full-year homeware sales indicate a 6.72% increase from the previous year and a 10.06% increase for sporting goods, based on a 52-week comparison, although the company’s 2021 year had 53 weeks.
During the fourth quarter, the sale of homewares however only increased by 1.36% and sporting goods increased by 11.15% compared to the same period the previous year.
Sports success
The trend of sporting goods sale increases has been prominent over a few quarters, according to Duke. For Briscoe, it is more about gaining significant market share in the sporting goods category
“I don’t know whether the category has been doing any better, but I think we’ve been doing better than the market here. So, I think we are happy to put that down to increase market share," he told NBR.
The company had not promoted heavily in housewares for a number of reasons including getting back to higher levels of stock with supply chain constraints.
“We’ve been a bit concerned if we promote very heavily then the question of getting back in the stock at a reasonable time, that was marginal for us. So we haven’t pressed as heavily in the period just past in terms of promotions for homewares as we have sporting goods,” Duke said.
No online trend obvious at this stage
Full-year online sales grew 21.01% overall. The proportion of online sales grew to 21.47% - an increase from the 18.82% reported in March 2021, but down from the 22.14% posted in the Q3 announcement at the end of October.
Duke said it was too hard to indicate an online trend at this stage.
The closing of stores, particularly Auckland, for the first nine days of the fourth quarter due to Covid lockdowns, made it difficult to compare with the previous year, he said.
Shares in the company increased 5% today on the NZX.
Briscoe is due to report its full-year result including the dividend on Wednesday, March 16.
