Shares slump as Postie Plus issues profit warning

Clothing retailer Postie Plus today warned it may not live up to previous profit forecasts as unseasonally warm weather, a late Easter holiday and weak consumer spending dented April trading.

Postie Plus chairman Peter van Rij said a pre-tax earnings guidance of $5 million given at the retailer's half year result in March was "under threat".

Mr Rij said the extent of the damage caused by lower April sales could not yet be quantified, but said market conditions remained "highly competitive and difficult".

The news wiped more than 6 per cent off Postie Plus' share price in the opening minutes of trading, with the shares trading down 5c at 73c.

Mr Rij said while third quarter sales, at $29.25m, were 4.24 per cent ahead of last year on an all-stores basis -- reflecting a good trading period in February and March -- sales had turned down sharply in April as the Anzac and Easter holidays, warm weather and lower discretionary spending impacted.

"The company will strongly market seasonal product throughout May and June to enhance sales," he said.

"The group is in good heart and continuing to grow organically and is strengthening the group's brands."

Today's profit warning came as Postie Plus responded to a stock exchange query into why its shares rose 11 per cent, from 71c to 79c, on Monday.

Mr Rij said the company was concerned investors were not fully aware that the retail sector was undergoing some trading volatility.

"The company has apparently attracted favourable comment and our shares have been previously trading at a lower price earnings multiple and higher gross dividend yield than comparative retail sector stocks," he said.

Postie Plus shares have traded between 57c and $1.37 in the past year.

This week has been a mixed bag for retailers, with Briscoe Group yesterday reporting a 10.5 per cent leap in first quarter sales, or 5 per cent on a same store basis.

On Monday, The Warehouse said patchy sales and the late onset of winter led to a modest increase in third quarter sales of 1.3 per cent.

Sales for its flagship Warehouse NZ division were down 0.3 per cent on the same period a year ago , while same store sales for the quarter declined 2.7 per cent.

Briscoe Group added a further 5c to $1.52 this morning, while The Warehouse was flat at $3.85.

- NZPA