Next week the Premier Investments Limited (ASX: PMV) share price will be on watch when it releases its full year results.
Ahead of its results release on September 20, I thought I would take a look to see what the market is expecting from the popular retailer. Here is a summary of what to look for:
According to a note out of Goldman Sachs, its analysts are expecting Premier Investments to deliver total sales of $1,257.4 million in FY 2019. This will be an increase of 6.4% on FY 2018's result, but slightly lower than the market consensus estimate of $1,261 million.
Goldman expects this to be driven largely by Premier Investments' key Just Jeans, Peter Alexander, and Smiggle brands.
The broker has pencilled in a 9.5% increase in sales for Just Jeans to $233 million, a 13.2% increase in Peter Alexander sales to $247.6 million, and a 6.2% lift in Smiggle sales to $311.2 million. The latter is expected to have been driven by strong growth in Asia.
On the bottom line Goldman has forecast net profit after tax of $127.9 million and earnings per share of 80.5 cents, which will be a 17.8% increase on the prior corresponding period. The market is a touch more bullish and expects net profit after tax of $129 million and earnings per share of 81 cents, which will be a 18.8% lift on FY 2018's profit result.
Finally, Goldman expects a final dividend of 35 cents per share, bringing its full year dividend to 68 cents per share. This will be an increase of almost 10% year on year.
Should you invest?
Based on Goldman's estimates, Premier Investments' shares are changing hands at 19.5x full year earnings and offer a fully franked 4.35% dividend yield.
I think this makes its shares about fair value at the current level and worth considering. Though, it may be prudent to wait for the release of its results before making a move, just in case it falls short of expectations.
Incidentally, Goldman has a neutral rating and $16.40 price target on its shares at present.
