Hallenstein Glasson's forecast of a 25 per cent annual profit downgrade is in line with expectations and shows the firm has been unable to claw back all the ground it lost in its first half, an analyst says.
The trans-Tasman clothing group said today that its unaudited full-year group sales to August 1 were $208 million, down 5.5 per cent on last year's $220.1m. That meant the company, which reports on September 25, is expecting an profit after tax for the year of between $14m to $14.2m, 25 per cent lower than last year. In March the retailer reported a 40 per cent fall in interim net profit after underwhelming summer sales.
Chief executive Graeme Popplewell said at the time that the downturn in Australia, discounting and the impact of online shopping had all had an impact, but a variety of reasons had hampered all its brands.
The company, which owns women's fashion brands Glassons and Storm and menswear chain Hallenstein Bros, said today there had been some improvement in the second half.
However, second-half sales were down 2 per cent and projected earnings were down 5 per cent.
Forsyth Barr analyst Chelsea Leadbetter said the company had obviously picked up the pace, despite the warm winter that had hampered the sales for many clothing stores.
"To be only down 25 per cent for the full year, they have improved significantly on that very weak first-half result," Leadbetter said.
Apparel had been "a very tough category, with online taking some share in that space and if you look at general retail sales as well, it's been pretty low growth all through this year and last, really", she said.
Hallenstein had had a few teething issues with inventory but the company had recovered from tough periods before, she said.
Hallenstein shares were up 2 cents to $3.07 in mid-morning trade.