Shares in Hallenstein Glasson sank to a four-year low after the clothing chain slashed its first-half earnings outlook on tepid Christmas sales, in another sign the rag trade is struggling to recover from a protracted downturn.
The stock dropped 8.6 percent to $3.20 and earlier touched $3.10, the lowest since December 2009, adding to yesterday's 18 percent slide when the Auckland-based company warned earnings will fall to between $6 million and $6.3 million in the six months ending Feb. 1 from $10.3 million a year earlier.
Last year the retailer had been among a group of clothing chains who gave profit warnings as tough competition in Australia put a squeeze on margins and as the warm winter kept consumer spending on apparel under wraps. Hallenstein chairman Warren Bell had warned of a possible further downgrade at the annual meeting on Dec. 12 unless sales picked up in the crucial peak summer trading period.
``This is the third profit warning they've had in a few months,'' said Mark Warminger, who helps manage $710 million in New Zealand equities at Milford Asset Management in Auckland. ``Apparel retailing is tough across New Zealand and Australia.''
Government figures showed a slump in consumer spending on apparel in the September quarter, with retail sales of clothing, footwear and accessories sliding 6.8 percent in the three months ended Sept. 30, the biggest quarterly fall since the series began in 1995.