NATIONAL: Country Road has reported a 12.2 per cent drop in profits after tax for the first half of 2009/10, despite recording an increase in total sales.
Audited results for the half year to December 31 2009 revealed Country Road's profit after tax was $9 million, down from $10.3 million in the first half of 2008/09.
Country Road's acting CEO Glenn Gilzean said the company's investment in Trenery, including six new Trenery stores, had impacted on profits.
“We have been pleased with our top line growth in all channels despite the challenging trading conditions and understand the short term decline in our bottom line is largely attributable to the start up costs of our new brand Trenery,” Gilzean said.
Country Road's half year directors' report also referenced the disparity between the brand's total retail sales (up 18 per cent) and its total concession sales (up 5.5 per cent) for the half year to December 31 2009.
“Although we delivered double digit sales growth in our retail stores, the concession businesses in David Jones and Myer were more challenged achieving modest single digit growth,” the report said.
As previously reported by Ragtrader online, Country Road's total sales for the first half of 2009/10 were $196.8 million, an increase of 12.6 per cent on the first half of 2008/09. Gilzean reiterated his belief that the immediate economic outlook remains uncertain.
“Given recent interest rate rises and the impending anniversary of government stimulus payments we remain cautious about growth prospects in calendar 2010,” Gilzean said.