Thursday 03 November 2016 11:12 AM
Briscoe 3rd-qtr sales rise 8.4% as aggressive promotions squeeze margins
By Paul McBeth
Nov. 3 (BusinessDesk) - Briscoe Group, which operates stores selling household items and sporting goods, lifted third-quarter sales 8.4 percent after spending more on campaigns to woo customers, putting a squeeze on the retailer's margins.
The Auckland-based company generated $125.6 million of revenue in the 13 weeks ended Oct. 30 from $115.9 million a year earlier, with sales at it homeware stores up 7.2 percent to $79.1 million and sales at its sporting goods stores rising 10 percent to $42.1 million, it said in a statement. That was bolstered by the opening of three new stores in the period, and on a same-store basis homeware sales increased 4.6 percent and sporting goods rose 6.9 percent.
Briscoe managed to widen its gross margins in the first half of its financial year to 40.5 percent from 38.9 percent a year earlier with more rigorous inventory management combining with increased sales to drive up profit, though its need to compete more aggressively meant its third-quarter margins shrank in the latest period. Still, the company expects annual profit to "substantially exceed" last year's record $47.1 million.
"We expect gross margin percentage to remain under pressure for the balance of the financial year from the continuation of aggressive promotional activity and also the impact of hedged foreign exchange exposures taken across the last 12 months at less-favourable rates than those available currently," managing director Rod Duke said. "As we begin the crucial final quarter we remain optimistic in our outlook."
Briscoe's year-to-date sales were tracking at $393.9 million, up 9.5 percent from a year earlier, with homeware revenue increasing 7.5 percent and sporting goods sales up 13 percent.
The shares, of which Duke owns about 78 percent, were unchanged at $3.65, up 31 percent this year.