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Hallenstein Glasson says 1H profit dropped 40%

Hallenstein Glasson says 1H profit dropped 40% as margins shrank

By Jonathan Underhill

Feb. 4 - Hallenstein Glasson Holdings Ltd., owner of the mean’s and women’s clothing chains, said first-half profit tumbled as much as 41% as sales fell and competition for sales shrank its margins. Its shares fell 1.8% to NZ$2.19.

Profit fell to between NZ$5.4 million and NZ$5.6 million in the six months ended Feb. 1, the company said in a statement. Earnings in the same period last year was NZ$9.2 million. Sales in the key month of December fell 4.6% from a year earlier and were down 2.8% in the first half, the company said today.

The clothing retailer has been guiding expectations for sales and earnings lower since early last year as consumer confidence fell and the property market cooled. Government figures tomorrow are expected to show the jobless rate rose to 4.7% in the fourth quarter as the economy suffers a prolonged contraction.

“An intensively competitive retail environment has resulted in margin erosion of approximately 3 percentage points on last year while we protect market share and manage stock levels,” the company said.

“Reduced interest rates have resulted in lower interest income on cash reserves, and the cumulative impact on increased costs have impacted on profit,” it said.

Sales in January “have shown a slight improvement,” gaining 1.9% from a year earlier, it said.

Hallenstein is scheduled to release its first-half results on March 27. Shares of the company have declined40% in the past 12 months.


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