KEY POINTS:
Briscoe Group sales have fallen by nearly ten per cent from last year, prompting the retailer to warn half year profits may be halved.
Managing director Rod Duke said the group was trading profitably but expected to report a significantly lower bottom line profit for the half year to July 27 against last year's $10.5m profit which was also down 12.3 per cent on 2006.
Shares in Briscoe today fell 5 percent, or 5 cents, to a 40-month low of $1.17 .
Duke blamed the economy -- rising interest rates, and petrol prices, putting the squeeze on household spending.
He said other stocks would be similarly affected.
``You watch other stocks go. We are just the first cab off the rank.'
Shares in general discount retailer The Warehouse were down 4 cents to $5.72.
Duke said the full extent of the proift decline would " depend upon the buoyancy or otherwise of the retail market during the next three months in conjunction with our planned promotional programmes and further cost containment."
"Based on current estimates we expect the first half tax paid profit to fall within the range of $5 - $7 million."
The company which runs the Briscoes homeware and Rebel Sports chains said total sales for the quarter were down 6.4 per cent to $90.3m.
Its shares closed on $1.23 yesterday, having dropped from $1.67 on May 31 last year.
Duke said the gross margin percentage generated for the first quarter was below the margin for the same quarter last year, reflecting the continued competitiveness across the retailing industry.
Sales for the homeware stores segment fell 7.1 per cent on a same store basis and 4.34 per cent overall to $60.7m, while sporting goods sales decreased by 15.1 per cent on a same store basis or 10.34 per cent overall to $29.5m.
"The retail market for this first quarter of our financial year was markedly more challenging than for the first quarter of last year, reflecting a continuation of the difficult trading conditions we experienced in the second half of 2007-8" Duke said.
"During the quarter we have continued to place particular emphasis on cost minimisation, operating efficiencies, stock management and maintenance of market share, effectively `battening down the hatches".
- NZPA
