Universal Store, Premier Retail pile in the profits

In November alone, Australians spent $3.75 billion more at retail compared to the same pre-COVID period in 2019.

Two ASX-listed fashion retailers with a combined market capitalisation of more than $4 billion have today announced staggering sales and profit growth rates, just days after data revealed a considerable retail sales spike nationwide. 

This high growth is not even in comparison to the COVID-19 lull of 2020 either, but pre-coronavirus trading in the second half of 2019.

The larger of the two, Premier Investments (ASX:PMV) whose Premier Retail division owns such brands as Peter Alexander, Just Jeans, Portmans, Jay Jays and Smiggle, expects to report a 75-85 per cent lift in EBIT for the six months to 30 January, 2021.

The group headed up by Solomon Lew is expecting profits in the range of $221-233 million, with higher margins and a 60 per cent surge in online sales that now represent more than a fifth of revenue at $146.2 million.

Like-for-like sales in the 24 weeks to 9 January were up 18 per cent, although temporary store closures in parts of Australia, New Zealand, the UK, Ireland and Malaysia meant the total sales lift was just 5 per cent.

Meanwhile, Universal Store (ASX: UNI) expects to report an underlying EBIT growth of 61-67 per cent to $30-31 million, following a 24 per cent rise in sales.

Like Premier, Universal Store's like-for-like sales growth was higher than the overall rate - although by just 2.5 per centage points - and sales margins grew.

"Despite a significant period of disrupted trade in Melbourne and to a lesser extent Adelaide and Sydney the results delivered across the first half of FY2021 are well ahead of the results delivered in the prior corresponding period," says Universal Store CEO Alice Barbery (pictured).

"This not only highlights the ability of our team but also our agility to operate in what has been an unpredictable trading environment."

Last week, footwear retailer Accent Group (ASX: AX1) - known for such brands as Stylerunner, Hype DC and Athlete's Foot in Australia and New Zealand - announced expected EBITDA growth of 40-45 per cent to $95-98 million.

"I am delighted with the way our team has executed through the all-important November cyber events and the lead up to Christmas," the group's CEO Daniel Agostinelli said at the time.

Today's news follows the release of new Australian Bureau of Statistics (ABS) data on Monday that showed a 13.3 per cent jump in seasonally-adjusted, year-over-year retail spending in November, rising by $3.75 billion to $31.65 billion.

This followed encouraging year-on-year growth rates of 7.1 per cent in October.

From October to November, Australia's clothing, footwear and personal accessories retailers witnessed a 26.7 per cent lift in sales, while there was a 21.1 per cent rise for department stores and a 12.7 per cent increase for household goods.

As it came out of its lengthy lockdown, Victoria had by far the highest seasonally adjusted monthly rise in retail turnover at 22.4 per cent, followed by Queensland (4.5 per cent) and Tasmania (3.4 per cent).

Business News Australia