RCG Corporation Limited's (ASX: RCG) shares have risen 1.6% today after the company released an update regarding its operations so far in the 2016 financial year (FY16). That compares to a 0.5% decline for the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO).
So What: RCG Corporation is an investment holding company that operates a number of footwear businesses, including The Athlete's Foot. It is also the Australian distributor for Merrell, Saucony and CAT (Caterpillar) brands, amongst others.
At its annual general meeting today, it said that The Athlete's Foot business had enjoyed strong conditions during the first 16 weeks of FY16, including like-for-like sales growth of 5%. Wholesale sales are also in line with management's expectations while retail sales from the Accent Group have continued to exceed forecasts, with like-for-like sales growth of 30%.
All in all, the group expects to report between $55 million and $57 million in earnings before interest, tax, depreciation and amortisation (EBITDA) for the full-year, resulting in an increase in underlying earnings per share of between 25% and 30%. Further guidance will be provided after the key December and January trading periods.
Now What: RCG Corporation has generated enormous returns for shareholders in recent years, in the form of both capital gains and dividends. Although I expect the business to continue growing however, the shares aren't cheap anymore suggesting investors may be better off looking elsewhere, for now.
