Briscoes Group of stores reported sluggish sales and increased costs (file image). Photo: 123rf
The slowing economy and a slump in consumer spending have dented first half profits of homeware and sports goods retailer Briscoes Group.
Key numbers for the six months ended July compared to a year ago:
- Net profit $42.75m vs $45.6m
- Revenue $369.2m vs $367.9m
- Interim dividend 12.5 cents a share vs 12 cps
The results were closely in line with the company's recent guidance, but showed the group's margins under pressure as growth in sales from its main outlets slowed to crawl.
Briscoes Group managing director Rod Duke said the result was a good performance given the headwinds the company had to deal with.
"The team have done a great job in continuing to advance initiatives important for future growth while, at the same time, maintaining focus on the 'business-as-usual' imperatives of driving sales and controlling costs," Duke said.
Revenue from the Briscoes homeware stores increased marginally to $229.4 million, while Rebel Sport sales rose 0.5 percent to $139.8m, with online accounting for about 18 percent of overall sales.
Briscoes under pressure
The company's gross margin declined from 45.6 percent to 43.7 percent.
"Like all retailers we are facing margin pressure from a number of factors as the impacts of the ongoing economic downturn are felt." Duke said.
He said the aim was to protect about half of the 633 basis point margin gains it had made during the pandemic, and it did not expect to see margins decline to the same extent in the second half.
Costs increased as stock levels rose from $7m to $120m - to coincide with major sports events and higher transport costs.
Duke said Briscoes was looking to diversify its offering and had secured new brands including Dyson and Samsung products, and Huffer sports brand into Rebel Sports.
"We remain cautious as to the retail environment with ongoing uncertainty in relation to economic conditions, customer sentiment, cost pressures, higher interest rates and political uncertainty given the upcoming election."
It would be difficult to meet or beat last year's record annual profit of $88.4m, but the first half performance gave confidence of a solid second half result, Duke said.