Premier Investments Shares Drop 8% Amid Poor Earnings Report

By Archishma Iyer

(Reuters) – Shares of Australia’s Premier Investments fell 8% on Monday, poised for their worst session in over four years after preliminary annual results revealed that retail brand earnings fell short of market estimates.

The apparel and accessories retailer’s stock dropped as much as 8.1% to A$32.35, marking its worst session since April 2, 2020. It was down 4.7% as of 0100 GMT, while the broader benchmark declined 0.8%.

In an unaudited trading update, the company projected its fiscal 2024 total global retail sales for Premier Retail to be A$1.60 billion ($1.07 billion), narrowly missing the Visible Alpha consensus of A$1.63 billion and down from A$1.64 billion in fiscal 2023.

Premier Investments, which owns brands like Peter Alexander and Smiggle, estimated its fiscal 2024 operating earnings at approximately A$341 million, reflecting a 13% decline in the second half of the fiscal year, as per E&P Capital.

E&P retail analyst Phillip Kimber noted that the updated outlook indicates tough trading conditions in 2H24, aligning with other discretionary retailers that have recently reported similar trends.

Last month, Myer Holdings, a department store chain, forecasted a decline in its annual profit due to reduced consumer spending and store closures.

Consumers have been cutting back on discretionary spending as savings are impacted by inflationary pressures and an uncertain economic outlook.

Earlier this year, Premier Investments mentioned its ongoing efforts towards the demerger of Peter Alexander and Smiggle, first announced in late March. However, Kimber remarked that the company is well-positioned among discretionary retailers due to its strong share price performance.

The trading update did not include its investment portfolio. Fiscal 2024 results are set to be announced on September 25.

($1 = 1.4988 Australian dollars)