Briscoe third-quarter sales rise 15%; retailer upbeat heading into Christmas

Tuesday, 3 November 2020

Retailers like Briscoe Group have benefited from strong consumer demand during the Covid-19 pandemic as people spent money at home rather than travelling overseas.

Briscoe Group, which owns the Briscoes Homeware, Rebel Sport, and Living & Giving chains, posted a 15 per cent gain in third-quarter sales and was upbeat heading into the key Christmas period.

Sales rose to $161.3 million in the 13 weeks to October 25, from $140.3m last year, the company said. Homeware sales lifted 12 per cent to $98.7m, while sporting goods sales jumped 19 per cent to $62.6m.

The retailer last month voluntarily paid back an $11.5m Covid-19 wage subsidy to the government after trading picked up following a tough first quarter when sales slumped more than a third. Its focus has now turned to the fourth quarter, which includes the key Christmas trading period and typically accounts for 35 per cent of annual sales.

Briscoe managing director Rod Duke says the retailer has rebounded after Covid-19 disruptions.

”The significant increase in sales reported for the second quarter has continued through this third quarter,” said managing director Rod Duke. “After trading interruptions due to Covid-19, we’re delighted in the way the group has rebounded to produce consecutive quarterly double-digit sales growth. Importantly, this augurs well for continued strong sales as we commence the crucial final quarter.”

* Briscoe to pay back $11.5m wage subsidy after 'strong sales'

New Zealand is used by a World Health Organisation spokesperson as an example of a country whose Covid-19 response has been effectively communicated to communities.

* 'Unparalleled demand' delivers strong result for Briscoes

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Duke said the wage subsidy repayment would impact the company’s second-half and full-year results, as would the absence of a dividend payment from outdoor company Kathmandu. Briscoe owns 6.8 per cent of Kathmandu and last year received $6.8 million in dividends from its investment.

“Notwithstanding this, I am optimistic that if the current trading momentum continues, we can still produce a full-year result to the end of January of which we can be extremely proud,” Duke said.

As a result of the disruptions caused by Covid-19, Briscoe has changed its promotional activity and inventory management, which is having a “very positive impact” on gross profit margin, Duke said, without providing details.

The group’s online business showed “impressive growth”, accounting for 16.3 per cent of group sales in the third quarter, while more than 25 per cent of online sales in the quarter were through Click and Collect shopping after the company accelerated the roll-out of this option to all stores during lockdown, he said.

Briscoe is “progessing well” with its work to enhance customers’ shopping experience, improve its supply chain and source new revenue streams, with some “quick-wins” expected before the end of this financial year, Duke said.

“I am very confident that with the initiatives we have in place, the group can produce a remarkable full-year result. Just how close we get to achieving last year’s profit will depend on how buoyant trading is across the crucial fourth quarter,” he said.

Last year, Briscoe posted an after-tax profit of $62.6m. In the first half of this year, profit was $28 million.

Briscoe shares gained 3.7 per cent in mid-morning trading on Tuesday to $4.19, and have increased 10 per cent this year.