Footwear empire RCG Corporation has blamed the harsh Federal Budget for its downgraded full year earnings forecast.
The company, owner of The Athlete's Foot brand, confirmed that it expects fiscal 2014 full year earnings before interest, taxes, depreciation, and amortization growth to be in the range of 10 per cent to 12 per cent.
This is lower than the 15 per cent earnings growth previously forecast by the company.
RCG said revision to the full year outlook is largely due to the worse than expected performance of the company’s RCG Brands division during the months of April and May.
Commenting on the results, the company said this has been driven by “the widely reported decline in consumer confidence which has adversely impacted retail across all categories in the weeks leading up to, and since, the Federal Budget announcement”.
This predicament has been further exacerbated by unseasonably warm autumn weather nationwide, which in turn has had a negative impact on sales of winter product.
Notwithstanding these issues, RCG reported that its other major business division, The Athlete's Foot, has continued to trade “largely inline with expectations”.
The Athlete's Foot like-for-like sales growth for the 11 months to the end of May was 2.75 per cent.
Like-for-like sales for the four months February to May have been flat, however, this has been branded “a satisfying result” by RCG in the face of what it has said is “the worst retail environment in recent years”.
Despite the lacklustre results, RCG’s board reiterated that it remains confident in the strength of the company’s businesses and continues to be focused on executing its plans to deliver long-term sustainable growth for all stakeholders.