Smiggle slumps as Peter Alexander surges in transformational year for Premier Investments

Slimmed down retailer Premier Investments (ASX: PMV) has defied a slump in sales from its Smiggle business to post a 31 per cent increase in full-year net profit to $338.2 million for FY25.

The earnings performance has been achieved in a transformational year for Premier Investments which offloaded its Apparel Brands division – which comprised Just Jeans, Jay Jays, Jacqui E, Portmans and Dotti – to Myer Holdings (ASX: MYR) earlier this year.

It also compares with the $211.2 million loss for FY25 posted by Myer last week, largely y due to one-off costs of $213.3 million associated with the Apparel Brands acquisition.

The Premier result, which was buoyed by profit from discontinued operations following the sale of Apparel Brands, was achieved on a 3.6 per cent increase in group revenue to $852.8 million.

However, pre-tax profit of $220.3 million was 14.9 per cent down on the previous year.

While investors boosted Premier’s share price as much as 5.5 per cent to a high of $21.50 in early trade following today’s profit announcement, the retail group has revealed a significant softening of the Smiggle stationery business which suffered a 10.7 per cent drop in global sales to $264.2 million.

The Smiggle downturn has been offset by a record result from the group’s Peter Alexander sleepwear fashion business which lifted revenue by 7.7 per cent to $548 million.

After selling Apparel Brands to Myer, the high-margin Smiggle and Peter Alexander operations are the remaining retail assets of Premier Investments, which also holds a $1.17 billion interest in electrical goods brand Breville Group (ASX: BRG).

While conditions have improved for Premier Investments in the first six weeks of the current financial year, with Peter Alexander sales up 9.2 per cent, Smiggle sales are tracking 4 per cent below the same time last year.

Premier says the result at Smiggle, which has operations in 20 countries, reflects “continued cost of living pressures across global markets”.

But Premier Retail’s interim CEO John Bryce points out that the EBIT margin of both Smiggle and Peter Alexander remains “best in class” at 24.1 per cent despite these pressures.

“Peter Alexander continues to delight with another record full year result,” says Bryce.

“The teams at Peter Alexander and Smiggle remain committed to delivering innovative products and seamless shopping experiences that delight our customers.

“To enhance this further, Peter Alexander will launch the ‘Peter’s Dreamers Rewards’ loyalty program in October 2025.”

Smiggle is also progressing plans for its own new loyalty program, scheduled for launch early next year.

Premier’s chairman Solomon Lew describes FY25 as a year of “significant change” for the group.

“From working through a robust due diligence process with Myer, to completing the sale of the five-brand Apparel Brands business to Myer on 26 January 2025, to emerging as a high-margin two brand business across multiple countries – this year has been both challenging and exciting,” he says.

“Premier’s transformation, although still ongoing, ensures that the business is best placed to maximise future opportunities and deliver for shareholders.

“Premier continues its ownership of the high margin, iconic brands of Peter Alexander and Smiggle. The team is focused on leveraging growth in existing markets and expanding the reach of both brands in new international markets over the coming years.”

Premier Investments is paying a final fully franked dividend of 50c per share for FY25.