NEW ZEALAND: Pumpkin Patch is predicting a fall in half year net profit tax to between $7.5 million and $8.5 million, following lower than expected sales across the Australia and New Zealand markets.
According to an update on trading conditions and guidance on first half earnings, released today, the childrenswear company experienced challenging trading conditions in the second half of the 2010 financial year, which has impacted on sales in 2011.
Pumpkin Patch chief executive Maurice Prendergast said a slow start in the delivery of summer inventory, cooler weather in Australia and snowstorms in the United Kingdom, coupled with the fixed nature of store overheads has also made trading particularly difficult.
“It was always going to be extremely hard for us to repeat the very strong half year performance we had in 2010 with the challenging conditions we have faced in all markets since then. Many of our consumers have [also] chosen to retire debt in the wake of the global financial crisis,” he said.
However, Prendergast is confident short-term trading weakness will not affect the company’s longer-term strategies.
“We are able to ride out this short-term trading weakness due to a strong balance sheet and are continuing with our longer term strategies outlined at our annual shareholder meeting. Our store expansion programme in Australia, Ireland and the United Kingdom, and the trial of our new concept Charlie & Me remain on track,” he said.
The company expects to release its first half result to the market in detail on March 1, 2011 and is currently predicting full year earnings to be in the range of $16 million to $18 million.