Posts Tagged ‘retail sector’

Harvey Norman expecting a very merry Christmas

Tuesday, November 24th, 2009

Harvey Norman is looking at a 40% increase in profit for the December half, and after Gerry Harvey’s glowing forecast on the weekend, the HVN share price leapt up 5.1% yesterday.

Gerry Harvey’s expectations of sales for the year being “an absolute record” sent the share price upwards yesterday, and the company needed to back up the hyperbole with an announcement to the ASX after market close last night.

Sales for the period 1 July 2009 to 22 November totalled $1.93 billion, an increase of 7.7% from the previous corresponding period. Unaudited preliminary accounts indicate profit before tax and minority interests should exceed those of last year by 40%.

Sales are up in flat-panel tvs and notebook computers, and rising consumer confidence is fuelling a happy Christmas for Harvey Norman.

Harvey Norman
ASX Code: HVN

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$1bn flood of interest in Myer

Tuesday, October 27th, 2009

Retail investors have flooded Myer with applications for $1 billion worth of shares in next Monday’s float, making this the biggest offering for retail shareholders since Telstra’s T1 sale in 1997.

The institutional bookbuild begins tomorrow. It’s expected that altogether there will be a 50-50 split between retail and institutional investors.

As the Myer team take their investor roadshow through Asia, US institutional investors are putting the pressure on the company’s majority owners TPG and Blum Capital to fully sell down their stake before the float.

Myer’s chief executive Bernie Brooks says there has been strong US interest in the float, with the Australian economy presenting an attractive environment for international investors, and the examples of JB Hi-Fi, David Jones and Woolworths showing Australian retail shares can be a lucrative option.

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Myer prepares for float

Friday, September 11th, 2009

Myer has confirmed it will get the ball rolling on pre-registration for its public float, after releasing some strong earnings results yesterday.

Profits were up 15% to $109 million, beyond expectations.

The public float of Myer has been highly anticipated, and along with carsales.com is expected to be among the major profile floats of the year.

Carsales.com had a strong debut yesterday, and this performance, along with the rising sharemarket, is expected to encourage those companies which shelved their float plans during the worst of the economic crisis.

There are some reports that Myer will require shareholders to sign up to the Myer One loyalty program, in an effort to increase the customer base. There is also speculation that existing Myer One members will receive preferential treatment during the float.

400 senior managers have already been issued shares under the employee scheme.

A prospectus is due to be lodged around September 28.

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Bended elbows boost Foster's profits

Wednesday, August 26th, 2009

Our enthusiasm for beer continues to buoy profits at Foster’s, with bottom-line annual profit up a staggering 282.3% to $438.3 million.

The growth in beer, cider and spirits sales has partially offset the struggling wine operations, where a GFC-related decrease in demand and the company’s exit from the cask market have had an impact.

Revenue from pre-mixed spirits was down 24%, following the government’s tax increase on alcopops.

Foster’s expects it will take two years to lift and sustain performance at a new level, as a transformation agenda yields greater efficiency.

ASX Code: FGL
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Woolies set to take on Bunnings

Tuesday, August 25th, 2009

Woolies is set to take on Wesfarmers’ Bunnings chain for a chunk of the $24 billion home improvement market.

In a joint equity agreement with US retailer Lowe’s Companies, Woolworths has made a takeover offer for Danks Holdings, Australia’s second-largest hardware retailer.

The board of Danks has unanimously recommended the offer to its shareholders.

The proposal offers $13.50 per Danks share, which yesterday closed at $8.20, and there will be a 53 cent dividend per share.

Danks currently supplies and markets to 583 Home Timber & Hardware, Thrifty-Link Hardware, and Plants Plus Garden Centre stores and to a further 939 independent retailers. In its announcement this morning, Woolies said it intends to secure 150 new sites within 5 years.

Under the joint venture, Lowe’s will own one third of the new chain.

ASX Code: WOW

ASX Code: DKS
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Good news from Flight Centre

Wednesday, August 12th, 2009

Flight Centre shares soared yesterday, up 20% after the company announced it expected to post an annual net profit of $36-40 million and indicated that conditions in the challenged industry were stabilising.

In a results forecast released to the ASX, Flight Centre showed a strengthened balance sheet, and pre-tax profits well above analysts’ expectations.

There was good news too from the company’s US arm Liberty, which broke even in the fourth quarter.

The company said there were positive signs showing for the industry, with cheap airfares and holiday deals stimulating demand.

The full year accounts will be released on August 25.

ASX Code: FLT
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Sales up for Harvey Norman

Monday, June 29th, 2009

Defying standard practice for an economic downturn, consumers have been buying up at Harvey Norman‘s winter clearance sale.

Sales results are better than expected, according to CEO Gerry Harvey, with the appeal of cheap imports counteracting shoppers’ reluctance to spend money on furniture and white goods during times of economic difficulty.

However with discounts of up to 70% the good sales figures come at the cost of healthy profit margins.

Gerry Harvey sees the trend as a positive indicator for the economy and a sign that unemployment will not reach double figures.

ASX Code: HVN
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The Australian: “Winter clearance gives Harvey Norman a lift”

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Profits up for grocery merchant

Monday, June 1st, 2009

Grocery and liquor retailer Metcash has reported a 2.55% growth in annual profit and a 8.51% lift in revenue.

The core grocery market seems to be remaining strong in the adverse financial environment, as consumers eat at home more often.

Metcash, which runs the IGA Distribution business, believes its profits can also be traced back to customer support for independent retailers.

Standout performers for Metcash have been beer sales, through the Australian Liquor Marketers division, and food service, soft drinks and confectionery.

Operational costs have also been streamlined through improvements to the supply chain and technology innovations.

ASX Code: MTS
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For more details on this news story, read this article in today’s Sydney Morning Herald.

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Discount retailers cashing in

Monday, May 18th, 2009

Discount department stores are emerging as winners from the GFC, as shoppers seek out cheaper shopping alternatives and look for better value when spending their government stimulus package payments.

Wesfarmers is seeing the benefits in their Kmart and Target sales figures, which are outperforming the more upmarket stores like Myer and David Jones. Woolworths Big W stores have also seen positive growth in the last quarter.

The trend is also being seen in the US, where Wal-Mart has reported a growing proportion of its demographic are shoppers on higher incomes, and 17% of the recent growth in store traffic is coming from new customers. The Wal-Mart chief believes the economic downturn has brought about a favourable change in consumer attitudes to discount stores, and in the types of products they are likely to buy.

Stocks for your watchlist:

  • David Jones: DJS.AX (ASX)
  • Wal-Mart Stores: WMT.N (NYSE)
  • Wesfarmers: WES.AX (ASX)
  • Woolworths: WOW.AX (ASX)

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