Premier Investments Ltd (ASX: PMV) shares are racing higher on Friday morning.
At the time of writing, the retail conglomerate's shares are up 8% to $13.55.
This follows the release of its half-year results before the market open.
Image source: Getty Images
Premier Investments shares jump on results day
For the six months ended 24 January, the company reported a 0.5% decline in Premier Retail sales to $452.8 million. This reflects a 4.9% increase in Peter Alexander sales to $312.3 million, which was offset by a 10.7% decline in Smiggle sales to $140.5 million.
During the half, four new Peter Alexander stores were opened and four were either expanded or relocated with further investment in fit out and customer experience. Management notes that over 15 further opportunities have been identified for both new and larger format stores in existing markets to better showcase a wider product offering.
Smiggle sales were down partly due to an 8.7% reduction in store numbers to 282 stores as the brand continues its focus on operational efficiencies. Smiggle's wholesale channel delivered growth in first half driven by long term agreements in the Middle East and Indonesia.
To address this decline, following a major review, the company has "set a clear strategic objective to reclaim the 6-12 year core customer market through innovative product, marketing and visual merchandising, utilising Smiggle's existing multichannel formats to drive sustainable sales and profit growth."
First-half underlying Premier Retail EBIT came in at $119.3 million, which is largely in line with its guidance for "circa $120 million."
On the bottom line, net profit after tax was $101.7 million. This was slightly stronger than the $99.3 million that UBS was forecasting for the half.
This has allowed the company to declare a fully franked interim dividend after skipping one last year due to its demerger and capital return. It revealed a payout of 45 cents per share. Based on its last close price, this equates to a generous 3.6% dividend yield.
Management commentary
Commenting on the half, the company's chair, Solomon Lew, said:
Peter Alexander performed strongly again in 1H26 and continues to consolidate its position as the country's leading sleepwear and gifting brand. The Brand's priorities in the second half are driving further engagement from a loyal customer base and continuing local and global expansion of the brand footprint.
Smiggle maintains strong brand fundamentals and a well-established multi-channel footprint. The strategic review has quickly identified growth opportunities available to Smiggle and we will be working on product repositioning, simplification and brand elevation over the second half and beyond with a clear plan to bring this brand back to growth in FY27. We look forward to keeping our stakeholders updated on this.
Outlook
A strong second half is expected for the Peter Alexander brand, with its performance ahead of expectations after the first seven weeks.
And while Smiggle's struggles are expected to continue in the near term, a return to growth is expected in FY 2027.
In light of this, subject to current trading conditions continuing, the company expects Premier Retail FY 2026 Underlying EBIT to be around $183 million. This will be down from $195.4 million in FY 2025.
