New Zealand group Hallenstein Glasson (HLG), which operates 30+ stores in Australia, has seen a 68.49% growth in overall sales in the first eight weeks of the new financial year. This is up from the prior year.
Last year, there were multiple store closures for much of the eight week period across Australia and New Zealand due to lockdowns, so the percentage increase is not directly comparable.
With a forecast of minimal Covid disruptions, while refocusing its key strategies of quality product, speed to market, customer service and digital investments, the Group expects a stronger year ahead.
However, it said there remains margin pressure caused by the USD exchange rate and the higher than normal freight costs. There have also been increases in operating costs due to inflationary pressure.
In its newly released FY22 results, HLG reports that overall sales were up $351.21 million (+0.1%) on the prior year ($350.76 million)
However, the audited NPAT was $25.61 million for FY22, a decrease of -23.2% on the prior corresponding period ($33.32 million).
Despite the drop in NPAT, HLG is “pleased” to achieve the results considering the numerous challenges it had faced in the period.
During the first six months of the FY22, HLG lost 5,432 trading days across AU NZ, resulting in a decrease of -6.2% in sales on the prior half year.
Sales were up 6.6% for the six-months ending on 1 August 2022 on the same period last year as all stores remained open throughout the season.
During this period, however, the business faced a difficult trading environment with the Omicron surges impacting on staffing and customers shopping habits, particularly in the New Zealand market.
According to HLG, there was a focus placed on negotiating better prices with suppliers, which helped hold the gross margin around 57%. However, this was off-set by increased freight costs and shipping delays.
The group also saw a higher inventory balance at year-end, due to goods in transit at the balance date. This was to ensure certainty of product availability during the upcoming peak trade period.
In Australia, HLG sales were $156.94 million in FY22, which was an increase of +17.43% on the corresponding period.
NPAT was $19.11 million, an increase of +16.4% on last year ($16.42 million).
During the year, the group opened three stores across Australia, and closed one. It also opened another store in the start of FY23.
Additional head office and studio space was bought in Sydney to support HLG’s expected future growth in Australia.
In New Zealand, sales for the year were $104.37 million, which was a decrease of -12.96% on the prior year.
Its NPAT also saw a decrease of -64.7% ($4.08 million) on the prior year ($11.55 million).
Online sales across HLG’s eCommerce grew over FY22 by 16.1% against the prior year, with significant growth experienced during periods of store closures.
Its online sales now represent 27.88% of total sales for the full financial year, up from 24.04% in the prior year.
HLG expects growth in online sales to become difficult in the coming year, comparing against lockdowns in prior years.
The group said they will continue investing in digital, with a focus on digital marketing and customer experience, to accelerate its online sales growth.
According to HLG, the Glassons app is undergoing continuous enhancements and now has more than 850,000 downloads.
As for its other subsidiary Hallenstain Brothers, its sales were down -7.5% to $89.91 million (including Australia) on the prior period.
Its NPAT was $2.09 million, a marked decrease of -56.6% from last year ($4.82 million).
Hallensteins has continued to see strong growth in its casual categories. The subsidiary will continue to improve its eCommerce and social media channels across AU NZ.