Briscoes Group forecasts its net profit to jump by 20% to $87m

Briscoes Group chief executive Rod Duke at one of his stores in Auckland. Photo / Dean Purcell

Briscoe Group shares rose after the homeware and sporting goods retailer said it expects to beat net profit guidance for the full year.

The company said in a fourth-quarter release that it now expects full-year net profit of $87 million, up 20 per cent on last year and exceeding the retailer's previous guidance of $85m.

"We have a very strong core business and our strategic plan is delivering ahead of expectations," managing director Rod Duke said.

The shares gained 31c or 5.35 pert cent to $6.10 following the news.

The retail chain, which operates Briscoes and Rebel Sports stores across the country will report its full-year result, including the announcement of a final dividend, mid next month.

Duke said the company had an "outstanding" final quarter, which included the crucial Christmas and New Year period, despite nine days of store closures due to the Auckland lockdown.

"Part of this year's success has been our focus on ensuring the business has had sufficient inventory to satisfy demand," he said.

"With the uncertainty around national and international supply chains, we committed to a strategy of securing product often months in advance of traditional timings, to minimise the widespread and widely reported supply chain disruptions."

Briscoe's unaudited annual sales rose 6.1 per cent to $744.4m. However, last year included an extra week due to a different financial calendar. Excluding the extra week, sales climbed 7.97 per cent.

Homeware sales lifted 4.93 per cent while sporting good sales rose 8 per cent, compared with 10 per cent growth the previous year.

Unaudited sales for the fourth quarter to January 30 (13 weeks) were $247.6m 0.22 per cent just under the $248.1m for the 14-week final quarter of last year.

Comparing this year sales to the similar 13-week period last year, group sales grew by 4.97 per cent.

Duke said amid the turmoil, uncertainty and continuing disruption of the pandemic, the group has had an outstanding final quarter which will, once again, result in record full-year sales and profit.

"This is a great achievement given retail sales last year were still flying high from the retail recovery post the first national lockdown and also that our Auckland stores were shut for the first nine days of this quarter.

Online sales growth

"Our online business continues to produce remarkable results with growth of 21 per cent this year, albeit on the back of further lockdowns but also too as a result of continuing developments and improvements implemented by both the E-commerce and store-fulfilment teams," he said.

The group also expects its full-year gross margin to increase "significantly" compared to last year.

"We expect group gross margin percentage for the full year to close significantly above last year's margin percentage."

This year's result also includes $1.7 million (after tax) of dividends received from the group's investment in Kathmandu Holdings. No dividend was received last year as a result of Kathmandu's response to the Covid-19 situation.