SYDNEY: Analysts remain cautious about clothing and accessories retailer Oroton's solid first half profit results predicting the expiry of one of its key licences could have a big impact.
In an interview with New Limited newspapers Goldman Sachs retail analysts George Batsakis and Will Charlton said the expiry of the Polo Ralph Lauren licence in June next year was an earnings risk for the company.
They cautioned this could have an impact on the luxury retailer's share price in the near term.
"We believe Oroton is generating excellent results for the Polo brand and is well placed for the licence to be renewed. However, it is worth noting that Polo Ralph Lauren of the US recently acquired the South East Asia Polo licence," the pair told New Limited.
Oroton announced earlier this week that like for like sales of Polo grew by five per cent in the first half of financial year 2009 with the analysts suggesting the brand generates 30 per cent of profit and 60 per cent of sales for the company.
As reported on Ragtrader online on Tuesday, Oroton as a whole opened 10 new stores including seven retail sites, one concession store and two factory outlets, and closed two stores due to landlord redevelopments. This took the total number of stores from 59 at the end of FY09 to 67 at FY09. A further two new stores are planned as well as an ongoing refurbishment program.