The Premier Investments Limited (ASX: PMV) share price has jumped more than 10% after the company made an announcement about a strategic review, gave a sales update, and announced its boss was leaving.
As a reminder, this is the business that owns the brands Smiggle, Peter Alexander, Just Jeans, Jay Jays, Dotti and so on.
We'll start with the trading update.
Record FY23 expected
The company announced that it expects to report total global sales of its retail division of $1.64 billion for the 52 weeks to 29 July 2023, which is up 9.7% year over year. This would be a record.
The ASX retail share is also expecting to report a record underlying earnings before interest and tax (EBIT) for FY23 of between $355 million to $357 million. That would be at least 6% higher than FY22 and more than 110% higher than FY19. According to the Australian Financial Review, consensus estimates were for $335 million of EBIT, so the guidance range is substantially more.
Investors love record-breaking performance, so it's probably not a surprise that the Premier Investments share price is higher.
These numbers are still subject to finalisation and external audit.
The above-reported numbers do not include any results from its investment segment.
The full-year result is expected to be released at the end of September 2023.
Strategic review
It also announced today that it has commenced a formal strategic review to assess its corporate, operating and capital structure.
The decision to do a review recognises the "increased scale of Premier Retail's various businesses, and the substantial opportunities for each of them."
Premier Investments noted that Peter Alexander's sales have more than doubled from five years ago and there are significant growth opportunities for new and/or larger formats and planned offshore market expansion. Smiggle has expansion planned in existing markets and is exploring new geographies.
The company also noted that the apparel brands have delivered ongoing growth through "best-in-class" execution in ANZ across its five brands. It's optimising its apparel store footprint while exploring "new store formats, fit-outs and optimal online execution."
Leadership want to ensure each brand is best positioned to take advantage of those opportunities for shareholders.
It will examine its dividend policies and the separation of the group into two or more entities through a possible demerger. The review will look at capital requirements, business plans, management structures, separation costs and any 'cost dis-synergies.'
There's no certainty the review will result in a change to the structure.
The AFR's reporting suggested that each of Peter Alexander, Smiggle and the remaining retail brands could be split into separate companies.
CEO departure
The third announcement was that CEO Richard Murray has resigned as executive director effective today, and his resignation from the CEO position is effective 15 September 2023.
John Bryce, the long-standing chief financial officer (CFO) of Premier Retail, will be the interim CEO and continue as the CFO.
The AFR reporting suggested there were "no personal issues" between Solomon Lew and Richard Murray, but the fit between Murray and Premier Investments hadn't "quite worked out as all parties hoped" because the company requires management of the design, sourcing, manufacture and distribution of fashion products, which is quite different to the JB Hi-Fi Limited (ASX: JBH) model. The resignation suggested the change of model was "more challenging than anticipated" according to the AFR.
Premier Investments share price snapshot
Since the start of 2023, Premier Investments is down 3%, but it's up 20% since 21 June 2023. The S&P/ASX 200 Index (ASX: XJO) is down 2% since 21 June 2023, and it's up 2.8% for 2023 to date.
