Investment bank analysts are not as gung-ho about Premier Investment’s retail arm – Smiggle and Peter Alexander – after the Solomon Lew-led company shared a trading update that didn’t meet expectations.
Jarden, Macquarie and Morgan Stanley have each dropped their 12-month target prices for Premier (ASX: PMV). Jarden now expects PMV to hit a share price of $16.90 in the next 12 months, which is down from the bank’s recent projection of $21.30.
Macquarie is even lower at $16.20, down from $20.80.
Morgan Stanley is slightly more positive, bringing its 12-month target price down to $20.60 from $24.00.
Currently, PMV’s share price sits at $15.48 as of writing (11:50am, December 12), which is down by around 15 per cent from its peak early Friday morning last week – just before the group released a trading update. PMV’s most recent peak was $22.90 in mid-September 2025.
All three investment banks highlighted ongoing challenges in the Smiggle retail brand, including struggling sales and a leadership search that is yet to bear fruit.
Smiggle’s global sales for FY25 were down 10.7 per cent year-on-year to $264.2 million, with the second half showing improved momentum with sales down 4.7 per cent compared to the second half of FY24.
Trading in early FY26 was slightly improved, down 4 per cent for Smiggle in the first six weeks of the new financial year.
In comparison, Peter Alexander’s FY25 sales were up 7.7 per cent to $548.0 million, with trading in the first six weeks up 9.2 per cent.
Sales aside, Smiggle has faced leadership challenges, well over a year after the sacking of its former managing director, John Cheston, over “serious misconduct”. Premier chairman Solomon Lew later shared allegations of gambling and drinking during work hours, alongside bullying and harassment. Cheston quickly rejected the claims.
Since Cheston’s dismissal in September 2024 – who now leads cheap jeweller Lovisa – Premier has yet to name a new permanent leader for Smiggle, with group chief financial officer John Bryce leading as interim group CEO for the Premier Investments portfolio. Judy Coomber leads Peter Alexander at a brand level as managing director.
The only other recent c-suite change made by Premier was promoting Georgia Chewing to interim chief operating officer for the Smiggle brand.
Solomon Lew told Ragtrader during a press call in September that his priority is appointing a boss for Smiggle.
"We're looking for the person with the right international experience as such, and a person that can negotiate in every country that we want to be in and build and build that business with partnerships," he said.
"We have a few of those partners already, and they're working pretty well. We know the value of that, and we do want to go into Africa or Congo or Nigeria or Peru or wherever the case may be. We want to go in with the right partners who understand the seasonal operation and with a seasoned retailer."
Morgan Stanley analysts went so far as to say that, despite the interim COO appointment, they don’t expect a meaningful recovery in sales for Smiggle until a new managing director joins. They add that this could potentially have a circa 12-month lead time.
They also pointed out that Smiggle’s United Kingdom market remains the source of underperformance.
“Smiggle UK drove the soft guidance, with weaker-than-expected sales post-back to school,” Morgan Stanley told investors. “The UK comprises ~1/3 of Smiggle's store footprint. The weak sales outlook suggests the recent store consolidation in the UK has not been sufficient to stem underperformance.”
Macquarie analysts added that its forecasts attribute product weakness in PMV earnings to Smiggle and not Peter Alexander, given the sleepwear brand reported record sales over Black Friday/Cyber Monday. Macquarie’s foot traffic data tracking also indicates that the sleepwear brand’s stores are performing well, too.
However, Macquarie and the other two banks are looking for proof of concept for the well-invested Peter Alexander UK market. The sleepwear brand opened three stores and a dedicated website in the UK during FY25, costing Premier $10.9 million. Premier has yet to share performance details on the new market.
Macquarie noted that a challenged UK consumer environment may suggest some downside risk to its estimates for Peter Alexander.
In PMV’s FY25 annual report, Lew said Peter Alexander is investing in marketing activity and product specifically tailored to the UK market to grow brand awareness.
“Key market entry learnings will be taken into the next critical trading periods of Black Friday and Christmas gifting during the first half of FY26,” he shared in September.
Overall, Macquarie analysts shared that Premier’s expectations for the first half of FY26 – EBIT guidance of $120 million – is 15 per cent below VA consensus and implies a 7 per cent fall.
Premier claimed that discretionary spending remains under pressure, but Macquarie pulled up Australian Bureau of Statistics (ABS) data that showed otherwise. According to the ABS, monthly spending grew 3.5 per cent month-on-month and 6.4 per cent year-on-year in October 2025, with discretionary spending up 1.6 per cent MoM and 5.1 per cent YoY.
“Further, our High Frequency Consumer Data also indicates that discretionary consumer spend is not declining,” Macquarie analysts reported. “We think the quantum of Smiggle's expected decline… suggests continuing product weakness + share loss."
Macquarie also questioned whether Peter Alexander is still maintaining the circa 9 per cent sales lift in early FY26. The bank's forecasts are now expecting a slight moderation, albeit still positive, for the first half of FY26.
“Given this potential deterioration in PA, we remain neutral in our view on PMV.”
Jarden analysts were just as critical in their assessment, telling investors that Smiggle needs to get its mojo back and a leader needs to be appointed.
“We consider PMV a well-run, well-capitalised business with significant optionality via the international expansion,” Jarden shared in its note to investors. “However, uncertainty over management (Smiggle) and the success of the international expansion was further highlighted in the update.
“We expect UK losses to continue, and see risk around the Smiggle expansion with further store closures expected and competitive pressure likely.
“The above said, the macro backdrop is improving and valuation is undemanding – we retain our neutral rating with clarity over the Smiggle expansion key, in our view.”
Jarden added that it holds stock preferences over Harvey Norman, Universal Store and Temple & Webster.