MELBOURNE: Country Road has reported that its profits before tax may be 15 to 20 per cent lower than last financial year, despite an increase in sales.
The company reported that highly competitive discount led market conditions had impaired margins. It also said the material start up costs of new label Trenery were likely to result in profits being lower than last year.
Country Road announced a sales figure of $372.1 million for the twelve months to June 30 this year, which is an increase of 8.5 per cent on the previous corresponding period. Its comparable like-for-like sales were up 1.5 per cent.
The group’s total retail sales, including new brand Trenery, were $289.3 million, up 13.2 per cent on the previous period. Its total department store concession sales were $82.3 million, up 3.7 per cent, with comparable like-for-like store sales up 3.5 per cent.
A full result will be provided in August.
New chief executive office John Cheston, who joined the business on July 1, said the year had seen the anniversary of the government’s 2008/09 stimulus payments and also six interest rate rises.
“This impacted consumer spending and created a highly competitive retail market in the country,” he said.
He said the business remains cautiously optimistic for the year ahead due to the challenging financial climate.
“The last year has been challenging for our business however we continue to focus on our store rollout strategy for our two brands, whilst continuing to review and implement cost saving initiatives,” he said.
COUNTRY ROAD: Had pre-Christmas sales.
