Premier Investments Ltd (ASX: PMV) shares are ending the week on a positive note
In morning trade, the ASX 200 retail stock is up 1% to $22.30.
This follows the release of the Peter Alexander and Smiggle owner's half year results this morning.
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ASX 200 stock rises on results day
Given that the company has offloaded its Apparel Brands to Myer Holdings Ltd (ASX: MYR), the results we are going to look at today are for its continuing operations.
With that in mind, for the 26 weeks ended 25 January 2025, Premier Investments reported a 1.8% decline in sales to $455 million.
This was due to a weaker performance from the Smiggle brand, which posted a 14.5% decline in global sales to $157.3 million. This offset record sales of $297.7 million (up 6.6%) from the Peter Alexander brand despite the challenging discretionary retail environment.
Positively, Smiggle's performance has picked up. Management notes that an encouraging back-to-school campaign delivered positive sales growth in both Australia and New Zealand across the key five week campaign period from January into February.
In respect to earnings, the ASX 200 retail stock reported a net profit before tax (excluding significant items) of $148.4 million from its continuing operations. This represents a 12.7% decline on the prior corresponding period.
The company's continuing operations also include its investment in Breville Group Ltd (ASX: BRG). Management notes that it had a market value of $1.33 billion (and a balance sheet value of $373.8 million) at the end of the half.
Speaking of its balance sheet, Premier Investments continues to have a significant cash balance. It ended the period with cash on hand of $337 million. Though, this excludes the $82 million retained by the Apparel Brands as part of the transaction with Myer.
No dividend
Disappointingly for income investors, the Premier Investments board has decided that there will be no interim dividend with these results. This is because it recently paid a substantial distribution to shareholders following the Apparel Brands demerger.
The company expects to return to declaring dividends when it releases its full year results in September 2025.
Management commentary
Premier Retail's interim CEO, John Bryce, was pleased with the half. He said:
The EBIT margins of the new Premier Retail group of Smiggle and Peter Alexander remain best in class, despite our customers in all markets continuing to be impacted by increased cost of living pressures. We are once again particularly pleased with the record half-year result of Peter Alexander.
Premier Retail's iconic specialty retail brands of Smiggle and Peter Alexander continue to deliver exciting, innovative products to our customers with a focus on providing unique shopping experiences that delight. Looking ahead, Premier Retail is focused on the future growth opportunities of Peter Alexander and Smiggle with investment in new initiatives for these much-loved brands.
No guidance has been provided for the second half or full year.
