Smiggle, Peter Alexander owner expects lower earnings
Shares of Smiggle and Peter Alexander’s parent company fell to a one-and-a-half-year low following a disappointing earnings outlook, buoyed by consumers’ cost-of-living woes.
Premier Investments shares were down 9.8 percent at midday trading on Friday to $15.74 after the retailer said it expects to report core earnings before interest and tax of about $120 million for the 26 weeks to Jan. 24.
That figure is about 18 percent lower than consensus estimates, according to RBC Capital Markets analyst Michael Toner.
This is also below the $129.4 million earnings Premier reported for the first half of 2024/25 for pajama retailer Peter Alexander and children’s stationery and school supplies retailer Smiggle.
“Discretionary spending remains under pressure as consumers remain cautious due to the ongoing cost of living impact,” Premier Investments chief executive Solomon Lew told shareholders at its annual general meeting in Melbourne on Friday.
Despite the challenging environment, pajama brand Peter Alexander achieved record sales during the Black Friday and Cyber Monday shopping period.
“However, we do not underestimate the importance of the December/January trading period ahead of us, which is a critical driver for the group’s first half results,” Mr Lew said.
“The Group is well prepared for this important trading period ahead.”
Premier also announced on Friday that it would spend up to $100 million from its strong balance sheet on share buybacks over the next 12 months.
Premier had $333.3 million in cash on hand when its fiscal year ended July 26, and it also owned 25.4 percent of white goods maker Breville, an investment worth about $1.1 billion.
Mr Lew also said he was setting aside cash to take advantage of opportunities that may arise and would continue to review dividend and capital management strategies.
Premier sold its Clothing Brands, including Just Jeans and Jay Jays, to Myer in a transaction completed in January.
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