Clothing retailer Hallenstein Glasson Holdings says it is aiming to boost annual profit by 50 per cent as it continues to build its digital offering.
Group chief executive Mark Goddard told shareholders at the company's annual meeting in Christchurch today that he was "delighted" with its performance in the first 19 weeks of the financial year.
"The performance you see today is a direct result of the quality and passion of the
teams we have across the group, in our offices, our distribution centres, and particularly in our stores," Goddard said.
The NZX-listed company's profit in the 12 months to August 1 was $17.3 million, up from $13.7m the previous year.
Hallenstein Glasson Holdings would continue to develop its digital offering but physical stores were still a priority, Goddard said.
"While online is, and will continue to be a very significant growth strategy for the Group, there is no question that our physical stores do and will continue to play a critical and very exciting role in our future."
The company's online sales grew 44 per cent in the last financial year and account for 9 per cent of total group turnover.
Hallenstein Glasson was shifting to an experiential focus "to exceed customers' expectations", he said.
"The pace of change and disruption is forever accelerating.
"As a group, we are excited about these changes and the opportunities that exist to further differentiate ourselves from the competition," he said.
"We are introducing technology to simplify the store and shopping experience for both customers and our team – ensuring that we offer an exceptional and exciting retail experience."
The company's shares were trading up 5.3 per cent this afternoon, at $3.61.
Total group sales for the last financial year were $239m, up 6.93 per cent from the year before.
Glasson's New Zealand sales last year hit $89.50m, an increase of 7.16 per cent on the prior year, while Hallensteins Brothers sales were $91.10m, up 1.89 per cent.
Sales for retailer Storm were $8.34m, down 11.24 per cent on the previous year.
Online sales continued to grow at a faster rate than bricks and mortar, as a result of the company's commitment to invest in digital, said chairman Warren Bell.
Research analyst Mohandeep Singh said a forecast increase of 50 per cent for annual profit looked good from the outset but there were multiple factors at play.
"If you look at the first-half of last year, the Hallensteins brand had a really poor performance - their growth margin was the lowest in more than six years, so I suspect this 50 per cent increase, a big chunk of that, will be a rebound," he said.
A less than favourable start to summer last year would have also slowed the company's sales last year, Singh said.
"You're [also] getting a reversal of some of those factors where the weather is now more favourable, they've opened up a bunch of new stores that potentially weren't open last year and so you're getting the improvement impact from that," he said.
Hallenstein Glasson opened six new stores and renovated four in the last year.
There are 44 Hallenstein Brothers and 38 Glasson stores in New Zealand.
Purchasing stock at a more favourable currency rate six or more months ago would also be an influencing factor, Singh said.
"The currency is starting to come off, although, that won't effect Hallenstein Glasson until the second-half of the year."
Glasson's strong performance was also lifting group performance, Singh said.
"Business confidence has come off a little bit, there's an expectation that we'll see a little bit of a slowdown in the economy but if you take that as a marker, they're doing pretty well in a tough environment."