Shares in retail investment group Premier Investments plunged more than 15% after it released half-year sales figures and forecasts that included the peak Christmas retail trading period, less than two weeks before shareholders consider selling some of its brands to Myer Group.
Premier Investments said it expected global sales from the seven brands in its Premier Retail segment to be A$855 million- $865 million and underlying earnings before interest and tax (EBIT) to be $160 million-$165 million in the 26 weeks to 25 January 2025.
The company noted the first half of the 2025 financial year (1HFY25) was continuing with Back-to-School and January sales yet to conclude.
“Retail conditions have remained challenging through 1H25 with customers continuing to experience cost of living pressures across all of Premier Retail’s global markets and having a strong focus on value,” Premier said in an ASX announcement.
At 12:45 pm AEDT (1:45 am GMT) Premier Investments (ASX: PMV) shares were trading at A$28.02, down $5.02 (15.19%), after ranging between $27.47 and $30.50, which capitalises the company at $4.44 billion.
The company, 40% owned by retail veteran Solomon Lew, also said it expected the Apparel Brands business it plans to sell to Myer Group to deliver global sales for 1H25 of $405 million-$412 million and underlying EBIT of $31 million-$35 million, $16 million-$20 million less than for 1H24.
“Premier expects the percentage gross margin for the Apparel Brands business to be broadly flat against the prior corresponding period,” it said.
Shareholders of Premier investments and Myer meet on 23 January to approve the $1.1 billion sale of its Just Jeans, Jay Jays, Portmans, Dotti and Jacqui apparel brands to Myer in return for a 51.5% shareholding in Myer.
These new Myer shares, and Premier’s existing 26% Myer stake, will be distributed to Premier shareholders including Lew’s Century Plaza Group, making him the largest shareholder in Myer.
E&P Executive Director Consumer Philip Kimber said in a research note that he had not changed his neutral view of Premier Investments (PMV).
“Notwithstanding being one of the better positioned Australian discretionary retailers, PMV’s earnings have been under pressure through FY24 (coming off a very strong FY23). Premier Retail will decline again in 1H25 (down ~20%),” Kimber said.