Pumpkin Patch, the children's clothing chain, posted a 20 per cent decline in full-year earnings, meeting its forecast, as "challenging retail conditions" in all markets squeezed margins. The stock shed 3.4 per cent.
Profit before one-time restructuring costs fell to $10.1 million in the 12 months ended July 31, from $12.6 million a year earlier, the Auckland-based company said in a statement. Sales rose 3.1 per cent to $300.1 million. Analysts had forecast $334.2 million for sales, for a profit of $9.2 million.
Pumpkin Patch closed underperforming stores in the US and UK, while streamlining its head office functions and management structure to improve profitability, with the $39 million cost recognised in the 2012 results. The restructuring has made the retailer "a simpler and more agile business" though chief executive Neil Cowie gave little guidance for the coming year.
"All markets continue to experience challenging retail conditions and increased promotional activity," Cowie said. Still, overhauling the business means "we can now look towards the future with more confidence".
The stock fell 4 cents to $1.13 after the results were released, having soared 84 per cent. It is rated 'outperform' based on the consensus of five analysts in a Reuters survey.