After the time of writing, Premier shares are swapping hands for $27.74 apiece, up 3.47%.
Premier Investments share price jumps on record result
The Premier Investments share price is erasing some of this week’s losses following the company’s robust result for the 12 months ending 30 June 2021. Here are some of today’s key highlights measured against FY20’s scorecard:
- Statutory net profit after tax of $271.8 million, up 97.3%;
- Retail sales of $1,443.2 million, up 18.7%;
- Record retail gross profit of $927.9 million;
- Record retail gross margin up 331 basis points to 64.3%;
- Underlying retail earnings before Interest and tax (EBIT) of $351.9 million, up 88%; and
- Final fully franked dividend of 46 cents per share, up 27.8%.
What happened in FY21 for Premier?
Underpinning the robust performance, Premier’s Peter Alexander business delivered $100 million in sales growth in FY21. The record $388.2 million came from online, full-price and outlet stores across Australia and New Zealand.
Peter Alexander continuously invested in inventory, stocking its products at the key gift-giving periods across important holidays. This steered customers to freely shop without product shortages in the fast-moving retail environment.
In addition, the group’s Apparel brands also achieved record sales of $841.6 million, up 25.3% on FY20. A strong stock position led to improved sales and gross margin growth across all brands.
The group however faced temporary government-mandated store closures across its global store network for 52 of the 53 trading weeks. Premier stated this added immense operational complexity across every aspect of the entire business.
The impact of COVID-19 was particularly severe on the Smiggle business as schools were closed for long periods. A fundamental aspect to Smiggle thriving is children attending school.
The company noted that in countries and markets where schools have re-opened under easing restrictions, Smiggle is faring well.
Cash on hand stood at $523.3 million for the end of FY21.
What did management say?
Chair Solomon Lew touched on the results possibly driving the Premier Investments share price:
…Premier faced temporary store closures across our global store network due to government-mandated closures. On average, 176 stores were forced into temporary closures in any given week during the year. This resulted in 50,581 lost retail store trading days during FY21.
Yet today Premier is very pleased to announce record results for the year. Today’s announcement is a testament to the skills and dedication of our entire global team. To have delivered these record results in a very difficult and volatile environment is a truly outstanding achievement.
What’s next for Premier?
For the first 7 weeks of FY22, the group’s retail store network has continued to be impacted by store closures. In total, 661 stores were temporarily closed across Australia and New Zealand throughout August and into early September. This represents 56% of the global retail store network.
Premier advised it has since progressively been able to re-open more than 170 of these stores in the past two weeks. Global sales are down around 9.5% compared to this time last year.
Mr Lew also talked about FY22, adding:
Premier remains optimistic about the all-important second quarter of FY22 as the vaccine rollout progresses and the economy re-opens. Premier Retail has again made the strategic decision to invest in inventory and we have the appropriate supply chains to support this decision and ensure we are in stock of wanted product.
No guidance was given by management for the FY22 period.
Premier Investments share price snapshot
The Premier Investments share price has struggled over the past week but has been performing strongly this year so far.
It is up by more than 16% since January 1. It has also gained more than 47% in the past 12 months.