Double-digit fall in Hallenstein Glasson’s full-year profit

NZX-listed fashion retailer Hallenstein Glasson has reported a 23 per cent drop in net profit for the year ended August 1 to A$39.83 million despite sales growth in the second half. 

Full-year revenue rose by a humble 0.1 per cent to $547.05 million, after the company was “adversely impacted by the numerous lockdowns in both New Zealand and Australia” in the first six months of the year. 

Store closures due to covid measures cost the company 5432 trading days during the first half resulting in a 6.2 per cent drop in sales, according to the company’s filings. Despite all stores remaining open during the six subsequent months, the company said the business faced a difficult trading environment with the Omicron surges impacting staff absenteeism and customers’ shopping habits, particularly in its home market.

Meanwhile, full-year online sales surged by 16.1 per cent against the prior year, accounting for 27.88 per cent of overall group sales. 

While the Glasson business in Australia experienced 17.43 per cent growth in sales with net profit increasing 16.4 per cent on the year, in New Zealand sales were down by 12.96 per cent with net profit down 64.7 per cent to $6.35 million.  

The group’s menswear unit, Hallenstein Brothers, recorded $89.91 million in sales, dipping 7.5 per cent with net profit sinking 56.6 per cent to $3.25 million. 

“The group is looking forward to a year of comparably minimal Covid interruptions and refocusing on its key strategies of quality on-trend product, speed to market, customer service and investment in digital,” the company said. 

However, there remains margin pressure caused by the US dollar exchange rate and higher-than-normal freight costs. The company also expressed concerns regarding the increase in operating costs due to inflationary pressures.

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