13 Jun 2013

Tough market blamed for Hallenstein Glasson earnings

10:00 pm on 13 June 2013

Hallenstein Glasson is warning its profit will be lower this year as earnings are dragged down by aggressive discounting in the highly competitive womenswear sector.

The listed clothing retailer expects its full year profit to be between $18.5 million and $19.5 million for the year to the start of August, 10% lower than last year.

Group sales for February to May have fallen 1.6% compared with the same time last year.

The company blames the difficult trading environment for the womenswear result, but also points out that earnings in the second half of last year were bolstered by an insurance payment of more than $1.9 million.

Chief executive Graeme Popplewell says Glassons is facing aggressive discounting and many of its rivals, the larger Australian chains, have started their winter clearance earlier than usual.

Mr Popplewell says the dividend is unchanged for now, but it will need to be reviewed if earnings continue to deteriorate.

Shares in Hallenstein Glasson were down 40 cents, or more than 7%, at $4.95 on Thursday.