Hallenstein Glasson shares gain on better-than-expected profit forecast

Hallenstein Glasson shares gained 24.5 per cent following the market update. Photo / Jason Oxenham

NZX-listed clothing retailer Hallenstein Glasson Holdings anticipates its profit for the 2020 financial year will be down about 5 per cent on last year's earnings.

In a market update, Hallenstein Glasson said it expected its net profit after tax in the 12 months to August 1 to be within the range of $27.2 million to $27.8m, down approximately 5.1 per cent on its $29m profit in FY19.

It advised that its unaudited revenue was $287.7m in the year compared to $287.5m in the same period a year earlier.

Hallenstein Glasson shares were up 24.5 per cent to $4.27 at 12.30pm from $3.10 this morning following the better-than-expected earnings guidance.

Online sales accounted for 22 per cent of total sales in the 12 months, but had increased to 31 per cent of total sales in the past six months, group managing director Mary Devine said in the trading update.

Devine said sales for the six-month period covering the first round of lockdown were down 6.2 per cent on the same period last year, performing much better than anticipated due to the growth in online sales.

Online sales grew 80 per cent on the same period last year.

The group will pay out an interim dividend of 15 cents per share on September 4 and make an announcement about a full year dividend when it releases its final FY20 results on September 25.

Stores in its Hallensteins and Glassons retail chains in New Zealand were shut from March 26 until May 14 due to the Covid-19 pandemic. Its Australian stores closed around the same time and reopened in a phased approach throughout May.

The company says it continues to take steps to preserve liquidity through managing stock levels and costs across the business. Negotiations with landlords are continuing.