Hallenstein Glasson says high interest rates are starting to hit spending on clothing.
Clothes retailer Hallenstein Glasson today reported its net profit for the year to August 1 fell 1.3 per cent to $21.4 million.
Last month, the company said it expected net profit to be between $21m and $21.3m.
It will pay an unchanged dividend of 18 cents per share
on December 11.
Revenue rose 1.7 per cent to $200.2m and the operating profit fell 0.5 per cent to $32.3m.
Chairman Warren Bell said trading for the first five weeks had been slightly ahead of the prior year, and trading margins remained satisfactory.
"We do not perceive that the global credit squeeze will have any direct impact on the business, but the flow on effect has to be viewed with some caution as consumer sentiment becomes less robust."
He said consumer spending should be underpinned by other factors such as a continued strong outlook for commodity prices in both New Zealand and Australia.
"We also anticipate that the elections in New Zealand will be a positive factor for retail during 2008."
The company said there was a pick up in the second half with revenue up 3 per cent and profit before tax up 7.5 per cent on the same period last year.
Mr Bell said the New Zealand market was challenging, with rising interest costs finally beginning to dampen consumer spending.
In Australia, a more robust economy had provided a more resilient trading environment, with sales increasing 8.1 per cent.
During the period under review one store was opened in Australia, and since balance date a further store has opened at Kotara (Newcastle) taking total stores in Australia to 25.
Further sites in Australia are under consideration.
In New Zealand, five stores were added, with Glassons opening in Sylvia Park (Auckland), Whangarei and Queenstown. Hallensteins opened in Sylvia Park and Storm opened a new store in Ponsonby (Auckland).
Since balance date Glassons have opened in the new Westfield Mall at Albany, north of Auckland, taking total store numbers to 111.
Hallenstein shares were down 5 cents to $4.55. They started the year at $5.25.
- NZPA
