Retail giant Premier Investments has cited its 10-year strategy as the reason for its positive first-half 2020 results.
Amid difficult retail conditions, Premier recorded a 12% growth in net profit to $99.6 million.
The group clocked a 7.6% increase in overall retail sales to $732.1 million, with record online sales up 28.4% to $97.2 million.
Despite this result, Premier Investments owner Solomon Lew warned of "significant hardship" for retailers amid the COVID-19 pandemic.
He joined calls by Premier Investments CEO Mark McInnes for landlords to re-evaluate rental agreements amid the crisis.
Since the outbreak of COVID-19 Premier has closed two stores in Hong Kong, with more closures planned unless landlords approached the table.
In its announcement to shareholders this morning, the business flagged weaker sales and narrow gross margins as concerns.
"There could be significant hardship right across our business.
"We have been transparent in describing the ever evolving impacts on our group.
"At this stage it is not currently possible to estimate the extent of these impacts on the group’s current and future earnings.”
Despite manufacturing challenges in China, Premier has been able to secure the majority of its inventory for the second half with only minor increases in supply chain costs.
It will also go into the year with a strong balance sheet.
In its apparel division specifically, Premier reported a 6.1% increase in total sales for the half year to $393.5 million.
Like-for-like apparel retail sales were also up, recording growth of 7.5% compared to 1H19.
Among its apparel brands, Peter Alexander proved to be a standout with record results.
The brand recorded a sales increase of 11.2% to $144.8 million, a result of strategic growth initiatives and strong like-for-like sales growth.
Premier Investments chairman Solomon Lew said that despite facing many challenges, Premier was able to maintain strong growth.
"During the reporting period, Premier traded through Brexit uncertainty in the United Kingdom, protests in Hong Kong, devastating bushfires in Australia and a continuing fall in the Australian dollar.
"These pressures claimed many other retail businesses across Australia and the globe.
"Despite these factors, Premier delivered record results – this is a testament to the strategy we put in place almost a decade ago and the relentless execution of management against that strategy.
"Premier today announces record sales and profit with exceptional cashflows allowing us to provide the Group with great flexibility in these uncertain times," he said.
As part of its strategy over the past 12 months, Premier has closed 21 unprofitable apparel stores as a result of unreasonable rental costs from landlords.