Hallensteins says big drop in earnings coming

Hallenstein Glasson is forecasting a drop in full-year earnings of around 23 per cent.

The clothing retailer says sales for the 12 months ended August 1, were $198.19 million, an increase of 2.3 per cent over the same period last year. However, in the first six months, net profits fell more than 40 per cent to $5.48 million.

Second half profits are projected to be around $6.6 million, similar to last year's figure.

Chief execuitve Roy Dillon says that while sales for the winter season have shown a gradual return of consumer confidence in New Zealand and Australia, sales have been achieved through discounting at the expense of margin. He says the early start to winter has helped sales and May was a particularly strong month.

"Overall our inventories remain within budget, and we will continue to seek to improve market share in what we see as a subdued retail environment over the coming months," he said.

Sales in Australia benefited from the Australian Government's cash handout to taxpayers.

Hallenstein Glasson will make its full profit announcement on September 24.

- NEWSTALK ZB