Briscoe Group's first quarter sales up on previous two quarter results

Briscoe Group says its second-half could be impacted by outbound travel opening up. Photo / File

Homeware and sporting goods company Briscoe Group made $173.1 million in sales in its first quarter of trade in the three months to May 2.

The retail chain, which operates Briscoes and Rebel Sports stores across the country, increases sales revenue by 78 per cent, up from the $97m recorded in the same quarter a year earlier.

The bumper quarter comes following a weak first quarter of trade in 2020, impacted by 33 days of store closures as a result of mandatory Covid-19 lockdowns under alert level 4.

Compared to the same quarter a year earlier in 2019, its recent sales reflected an almost 15 per cent increase of revenue in that period.

Sales from its homeware division increased by 81.4 per cent to $104.6m, while its sporting goods sales increased by 74.1 per cent to $68.5m. Compared to the same quarter two years ago, pre-covid, its sales from Briscoes stores increased by 15.3 per cent and sales from Rebel Sport stores increased by 15.3 per cent.

Briscoe Group managing director Rod Duke, who is also the company's largest shareholder, said increased consumer demand experienced towards the end of last year had flowed through into the first quarter of the current financial year.

"Gross margin has also continued to be strong for the group, delivering ahead of expectations. The massive disruption to trading from Covid-19 enabled us to implement improvements to the way in which we analyse and construct our promotional activity and also to how we process and manage the flow of inventory through the business," Duke said in the NZX trading update.

Despite the strong start to the year, Duke warned that the group was aware of "possible pressure on consumer spending" as the borders gradually opened up to outbound travel.

"It's widely recognised that some of the increased retail spend experienced during the last 12 months has been a reallocation of spend which would otherwise have been used for international travel.

"Whilst we do not expect to deliver the same significant increase in sales for the second quarter as achieved in this first quarter, we are confident that sales for the half-year will be comfortably ahead of the $292.4m [revenue] reported for the first half of last year."

He further added that the progress the group had continued to make around increasing its profit margins and improving the customer shopping experience in its stores would deliver a double-digit net profit for the group for first-half of the year.

"The progress we continue to make on protecting margin and delivering our strategic initiatives around; enhancing our customers' shopping experience, improvements within our supply chain and sourcing new revenue streams is significant and I am very confident that the group is on track to produce a half-year result significantly ahead of the $28m reported for the first half of last year."

Briscoe Group shares were last trading at $5.64, slightly below a recent high in March of $5.80.

The retail group posted a $73.2m net profit despite facing ongoing disruption from the coronavirus pandemic in the 12 months to January - up 17 per cent on its previous annual earnings.