New Zealand’s Briscoe Group has recorded a total sales lift of 0.77 per cent to a record NZ$372.08 million (~A$344 million) for the first half of 2024, driven by a 1.58 per cent lift in its sporting goods subsidiary Rebel Sport and a 0.28 per cent lift in its homewares business Briscoe Group.
Despite the surge in revenue, the group’s net profit after tax (NPAT) fell 22.31 per cent to $33.2 million, with an underlying trading profit of $40.58 million, which is 95 per cent of last year’s half-year NPAT.
Meanwhile, Briscoe Group’s gross profit margin declined by 76 basis points for the period to 42.97 per cent.
Group managing director Rod Duke said it is crucial to control costs in the current economic market to protect the bottom line, adding that the group managed to hammer down cost growth for the first half.
“Like all retailers we continue to face margin pressure as the impacts of the ongoing economic downturn are felt,” Duke said. “Optimising gross profit while maximising sales is a constant focus for the team and they have done a terrific job this half in enhancing the promotional events for seasonal products, particularly for sporting goods, to increase sell-through and protect margins.
“In this environment controlling costs is crucial in protecting the bottom line. For this first half total store and overhead costs will close less than 1 per cent higher than last year, a fantastic achievement in a market strained by increased cost pressures.
“We were pleased earlier this year to be able to deliver a 6 per cent wage rate increase for our in-store hourly-paid team. The ongoing dedication and effort demonstrated by the entire team is incredible and greatly appreciated.”
The group’s half-year result will be negatively impacted as a result of KMD Brands Limited’s decision to not pay an interim dividend for the year. According to MarketScreener, Briscoe has a 6.75 per cent stake in the Kathmandu brand owner.
Group-wide online sales as a mix of total group sales nudged up in the first half by less than half a per cent to 18.77 per cent.
“With pressure on sales likely to continue we have focused strongly on inventory levels during the period,” Duke said. “Particular focus has been placed on seasonal inventory levels across both Briscoes Homeware and Rebel Sport.
“We continue to work closely with our supply partners in relation to optimising the group’s inventory position.”
Looking ahead, Duke said he and the team remain cautious over the retail environment, confirming that Briscoe will not be able to replicate last year’s full-year NPAT of $84.2 million.
“We are are under no illusions as to how the continuation of the current economic conditions could impact business performance for the remainder of the year,” he said.
“We are hopeful that the recent announcement of a lower OCR will mark the beginning of improved consumer confidence and improved retail spend.”