Hallenstein Glasson may have been a little premature in issuing its profit warning last week because Christmas is such an important contributor to its first-half results, an analyst says.
The clothing retailer last Friday said it expected to report a 20% drop in first-half profit to about $8 million if current trends persisted.
It also said group sales for the first 14 weeks of its current financial year were down 7% on the same period last year, with August and September being particularly challenging. However, more recent sales had been in line with the same period last year.
Craigs Investment Partners analyst Chris Byrne said Hallenstein Glasson had a reputation for being conservative and its guidance could prove to have been overly pessimistic.
"It depends on interpretation but we know Hallenstein Glasson has generally been a pretty conservative operator and I guess they've just decided that, considering it's been a difficult start to the year, they wanted to give investors an idea of where they were tracking," Mr Byrne said.
"But I would have thought ... you could have expected them to have maybe waited until the January period until they gave more specific bottom line guidance."
Mr Byrne believed the company would have a strong Christmas period and that it would end up achieving a better result than it had guided to.
