Premier Investments Ltd (ASX: PMV) shares are ending the week on a disappointing note.
In morning trade, the ASX 200 stock is down 12% to a 52-week low of $15.88.
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Why are Premier Investments shares crashing?
Investors have been selling down the Peter Alexander and Smiggle owner's shares today after responding negatively to a trading update ahead of its annual general meeting.
According to the release, the company has been battling with weak discretionary spending during the first half as consumers remained cautious due to ongoing cost-of-living impacts.
Though, one positive was that the Peter Alexander brand achieved record sales during the recent Black Friday and Cyber Monday promotional period. The company's chair, Solomon Lew, explained:
Now turning towards current trade. Premier Retail commenced FY26 with a clean inventory position. Discretionary spending remains under pressure with consumers cautious due to ongoing cost-of-living impacts. Despite a challenging global environment, the Black Friday trading week provided encouraging early signs ahead of the all-important Christmas, Boxing Day and back-to-school trading periods, with Peter Alexander delivering record sales across the Black Friday and Cyber Monday promotional period.
Mr Lew then revealed that based on current figures, Premier Retail first half underlying earnings before interest and tax (EBIT) is expected to be around $120 million.
This will be a decline of approximately 7.3% on the $129.4 million it recorded for the first half of FY 2025.
However, the company's chair concedes that there's still some very important trading periods to come, so this guidance is far from guaranteed. Lew added:
Premier expects Premier Retail 1H26 underlying EBIT for the 26-week period ending 24 January 2026 (pre-AASB 16) to be circa $120 million. That said, we do not underestimate the significance of the December /January trading period ahead which is a critical driver for the Group's first half result. The Group is well prepared for this important trading period ahead.
Share buyback
Failing to prevent Premier Investments shares from tumbling today is news that the company plans to initiate a buyback.
Due to its strong financial position, the company's board has announced a plan to return up to $100 million to shareholders through an on-market buyback. It stated:
The Board has determined that the current capital position provides opportunity to return up to $100 million of capital to shareholders, whilst maintaining a strong balance sheet to support future growth initiatives, and take advantage of opportunities that may arise in the future. As such, the Board announced today its intention to undertake a 12-month on-market share buyback of up to $100 million as part of its ongoing capital management strategy.
