The Premier Investments Limited (ASX: PMV) share price is zooming higher on Thursday after providing a second half trading update for its Retail business.
At the time of writing the retail conglomerate's shares are up over 10% to $18.65. At one stage they were up as much as 12% to $19.02.
What did Premier Investments announce?
According to the release, for the 26 weeks ending 25 July 2020, the company's global sales were $484.2 million. This was down $106.5 million or 18% on the second half of FY 2019.
Things would have been a lot worse for the company had it not had such a strong online business. The company's online sales hit $123.3 million during the second half, up $50.8 million or 70% on the prior corresponding period.
This means they contributed 25.5% of its total second half sales, up from 12.3% for the same period last year. For the full year, online sales were $220.4 million, up 48.8% on FY 2019 and contributing 18.1% of its total FY 2020 sales.
One big positive with this strong online sales growth is that its ecommerce sales deliver a significantly higher earnings before interest and tax (EBIT) margin than its retail stores.
In light of this, it now expects its second half Retail EBIT to be between $58.7 million and $59.7 million, up between $5.2 million and $6.2 million or 9.7% and 11.7% on the prior corresponding period.
This means that its full year Retail EBIT is expected to be between $184.8 million and $185.8 million in FY 2020, up 10.5% to 11% on FY 2019's result.
It is worth noting that the figures mentioned above are only for its Retail business and do not include any results from its investment division. Nor have they been audited or include any potential asset value impacts resulting from COVID-19.
Premier Investments' full year results are expected to be released to the market in late September.
