The first-half of FY22 proved to be "one of the most challenging and unpredictable halves of the pandemic", said Chairman Solomon Lew.
Premier's top-line was largely unchanged, with revenues down just -1.9% to $770m. Although profits fell sharply, down -13% to $163.6m.
Despite ongoing headlines about surging oil prices and cost-inflation, Premier gross margins remained intact, up 54 bps to 65.9%.
The number of lost retail store trading days helped provide context for the result, with 42,675 days lost in the first-half compared to 50,581 lost in the entirety of FY21.
Premier provided a brief outlook, saying that the second-half was off to a good start with total global sales up 6.2% in the first 5 weeks.
Major Australian brokers provided a sweep of updates on Monday. Consensus rates the stock as a Buy with a $31.20 target price.
Here's what the brokers had to say.
UBS, Ord Minnett, Macquarie and Credit Suisse are all Buy-rated on Premier Investments.
First-half earnings growth was in-line or slightly above broker expectations, propped up by like-for-like sales growth of 8.9%, solid margins and upbeat growth from online sales.
Morgan Stanley noted that sales momentum for the first five weeks of 2H22 was ahead of expectations.
Citi and Morgan Stanley are both Neutral-rated on Premier Investments.
Smiggle was flagged as a point of uncertainty among the company’s brands. Citi said that Smiggle’s recovery was below its expectations and expects the brand to return to pre-covid levels by FY23.
Smiggle contributes slightly below 20% of Group sales. The business has been particularly impacted by covid as government mandated closures of retail stores and school has muted any sales growth opportunities.
Several brokers noted that industry-wide inflation and elevated freight costs could weigh on short-to-medium term margins and ability to meet consensus earnings forecasts for FY22 and beyond.
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