KEY POINTS:
The boss of Wellington retailer Kirkcaldie and Stains says it has had a good first half, but warns that even his store faces strong headwinds.
The listed department store posted a 12.8 per cent increase in first half net profit to $829,000 for the six months to February.
Revenue rose 1.9 per cent to $24.37 million, helped along by strong fashion sales and a good summer.
The result contrasted sharply with that of homeware and sports store company Briscoe Group, which today reported a 6.4 per cent drop in total sales for its first quarter.
"Kirks," as it is often called, said its robust balance sheet placed the group on a sound footing to weather any economic downturn.
But managing director John Milford sounded a note of caution about the second half of the year.
"I think it will be challenging, I think we will have to work very hard, given all the circumstances we are facing."
Milford said it was wrong to compare the two retailers "apples for apples" because Kirk's figures covered six months not a quarter, and also because his store had a less price-driven model.
The store had enjoyed a "reasonable" Christmas and a long, hot summer in Wellington had made for good fashion sales early on in the season, reducing the need for mark-downs later.
Retail sales in the first half were 2.4 per cent higher than the same period last year on a like-for-like basis.
But Milford was concerned that continual bad news about the economy was eroding consumer confidence.
"Even people with money to spend will be reticent," he noted.
Experience had also shown that retail sales went down as an election neared, as people's minds were on other matters.
Earnings per share for Kirks shareholders increased to 8.3c from 7.4c, and the interim dividend was a fully imputed 5c per share compared to an unimputed 5c last year.
Shares in Kirkcaldie and Stains rose 1.79 per cent or 5c to $2.85 off a year low of $2.80 in April and a year high of $3.40 in December.
Shares in Briscoe Group had fallen nearly 9 per cent or 11c to $1.12 in early afternoon trade, off a year low of $1.10 touched earlier today and a year high of $1.78 in May last year.
- NZPA
