Hallenstein Glasson bucks retail trend with sales, profit up

Monday, 30 September 2024

Hallenstein Glasson was able to grow sales and achieve an improved after-tax profit in the year to August 1 despite the retail market and consumer spending power being significantly stretched.

Bucking a trend in the market, the retail company that operates chains Hallensteins and Glassons, posted an after-tax profit of $34.5 million - up almost 8% on last year’s $32m.

Group sales for the company increased 6.3% in the year to $435.6m, compared to $409.7m in the same period a year earlier.

Australian sales at both Hallensteins and Glassons brands improved across the year, but sales in the New Zealand market declined amid economic challenges.

In Australia, women’s wear retailer Glassons saw sales gain by 14% to $218m, while in New Zealand, sales decreased by 2.1% to $110m. Despite this, the local business turned a $10.8m profit for the company.

Sales at men’swear retailer Hallensteins, which operates most of its stores in New Zealand - with just five in Australia - increased 1.3% to $107.5m in the year, generating a $5.3m after-tax profit - up 37.4% compared to the previous year’s result.

Hallenstein Glasson will pay out a final dividend of 26.5 cents per share, taking its full year dividend to just over 50 cents per share.

Group chief executive Chris Kinraid said sales had improved again in the first eight weeks of the new financial year but was cautious on the outlook for the company.

“The result to date is driven by good performance from the Australian market, although cycling a negative prior corresponding period, and is not indicative of expectations for the peak trade period to come,” Kinraid told the NZX on Monday morning.

“The environment in New Zealand remains more challenging as the current economic conditions and cost-of-living pressures continue to impact on consumer spending habits across both brands.”

Kinraid said store refurbishment and new store openings would support the company’s growth in the year ahead.

“We continue to look for operational and cost efficiencies, while remaining flexible with our product offerings to ensure we are well positioned for the upcoming key black Friday and Christmas periods.”

Hallenstein Glasson shares are up, trading at around $6.36 a piece.

Devon Funds head of retail Greg Smith said Hallenstein Glasson was yet another example of a retailer finding trading much harder in New Zealand than across the Tasman.

The Australian business had helped the group to achieve strong sales, he sai.

Smith said he believed the group had also benefited from consumers having less money to spend and therefore opting to spend at cheaper brands.

“It may also be a case of benefiting from ‘consumers trading down’. Both Hallensteins and Glassons are discount brands and there is no confusion over that.”