Mosaic Brands' comparable sales during the Christmas period have been significantly impacted by the bushfire crisis, the business has stated in it latest trading update.
The announcement, which covers the period FY2020 first half ended 29 December 2019, stated that during the critical second half of November and December shopping period, comparable sales for the group were down 8%.
20% of the Group's stores have been directly impacted by the fires and approximately 32% of the business' 1386 stores are in regional areas where consumer confidence is fragile, resulting in the lower comparable sales.
Due to this impact, the business announced that it has donated $50,000 to the St Vincent de Paul Bush Fire Appeal and $1 million in clothing has been given to the GIVIT charity.
Despite the fires, the challenging retail environment saw the group prioritise gross margin over sales during the period. This strategy saw gross margin successfully increase to circa 59% up from 56%, driven by cost price improvements and a disciplined approach to discounting.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the period are expected to be in the region of $33 million, an increase of approximately 13% compared to the same period in FY2019.
Online sales excluding EziBuy accounted for 10% of total Group revenue, reaffiriming the business' decision to invest in this channel and digital strategies.
In a statement, Mosaic Brands said it expects to deliver strong results for the second half of FY2020.
"The Group is well prepared for the second half, with a dedicated team, excellent product and a healthy stock position.
"Management is confident of delivering consistent earnings growth in the future, subject to external conditions.
"Second half earnings are anticipated to demonstrate higher growth, relative to FY2019, than in the first half, particularly given the extraordinary external factors that have impacted first half revenue," the business said.
The trading update was released on January 14.
Mosaic Brands Limited operates brands Millers, Rockmans, Noni B, Rivers, Katies, Autograph, W Lane, Crossroads and Beme.