Country Road Group (CRG) has reported a $164 million loss in the last fiscal year as sales slid amid major restructuring and unfavourable market conditions.
For the year ended June 29, the group’s unadjusted loss before tax was $164 million, compared to a loss of $46 million in the prior year. Adjusted loss before tax was $42.3 million compared to a profit of $35 million in the prior year.
Sales were down 5.4 per cent for the 52-week period and comparable store sales were down 6.8 per cent, with a slight improvement recorded during the fourth quarter. The Country Road and Trenery brands continued to trade ahead of the rest of the CRG brands.
The group attributed the decline to a “significant restructure” following the separation from David Jones, which was designed to reconfigure the operating model and reset its structural economics as a standalone business.
This was coupled with an unfavourable macroeconomic backdrop, where high interest rates and living costs continued to impact consumer footfall and spending.
In addition, the group has been closing a number of its flagship stores, such as the one at the Queen Victoria Building in Sydney.
Gross profit margin declined by 390 basis points to 56.4 per cent due to the high promotional activity dominating the sector and the weaker Australian dollar inflating input costs. Reported EBITDA fell 41 per cent to $103.9 million.
Looking ahead, the group’s parent, South Africa-based Woolworths Holdings, expects business and consumer confidence in South Africa and Australia to remain subdued, with discretionary spend likely to remain constrained for the foreseeable future.
Global uncertainty stemming from higher US tariffs also presents a further headwind to the macroeconomic outlook.
“That said, the group is well oriented to benefit from its various investments in both foundational capabilities and new avenues of growth.
“We remain confident in our clear strategies, and expect the current financial year to deliver an improvement in the group’s overall financial performance, as we reap the benefits of our strengthened brands,” CRG said.
