HLG - Hallenstein Glasson

[Beagle]

Sales were up 7.2% for the first 7 weeks or so and then 4.8% the other day to the end of November and now only 4% up and now this from the outlook comments

"Whilst the new financial year started well, the outlook for the balance of this season and into the new calendar year remains unpredictable. Australia and New Zealand continue to be increasingly challenging retail markets. Consumers on both sides of the Tasman face ever-increasing pressures and challenges on their discretionary spend, and businesses in both countries are experiencing legislative change as well as challenging exchange rates and cost increase pressures".

Ouch, no wonder the SP has tanked. Margins are clearly under a material amount of pressure.

[bull....]

the headline running on my news feed says outlook uncertain for 2nd half , increased costs putting pressure on margins. lower nz/aus dollar

looks like another downgrade next yr coming

[couta1]

I'm waiting till Feb before I make any decisions on my holding, another big divvy a couple of months after that anyways.

[McGinty]

Not a good tone in the forecast, was it?

No mention of Margins or NPAT like last years forecast, just the difficulties. As Beagle mentioned the Sales growth figure is sliding back as well the closer to Xmas we get.

Happy to be sitting this one out.

[Raz]

It is interesting trend, I hate the lack of liquidity on this share and as a result will not hold a xoxo shareholding again. Been selling on the drip for what seem ever now

Construction sector downturn and its effect on the wider economy disposable income is certainly more pronounced in Australia than here currently.

ps Wife went over to Melbourne to do her christmas shopping and given how much she placed on credit cards I would have thought Aussie retail numbers should hold up.

[percy]

It is interesting trend, I hate the lack of liquidity on this share and as a result will not hold a xoxo shareholding again. Been selling on the drip for what seem ever now

Construction sector downturn and its effect on the wider economy disposable income is certainly more pronounced in Australia than here currently.

ps Wife went over to Melbourne to do her christmas shopping and given how much she placed on credit cards I would have thought Aussie retail numbers should hold up.

Classic...!

[percy]

Not a good tone in the forecast, was it?

No mention of Margins or NPAT like last years forecast, just the difficulties. As Beagle mentioned the Sales growth figure is sliding back as well the closer to Xmas we get.

Happy to be sitting this one out.

Yes the February update will be "judgement day".
On line sales at 12.8% is solid.
They always impress my with their logistics and stock control.
A great retailer.

[Beagle]

"Future Outlook

While the trading environment in both New Zealand and Australia remains challenging, the sales for first 18 weeks of the new financial year (from 2 August 2018 to 9 December 2018) are 4% ahead of the same period last year. However, because the December and January key trading months, which contribute such a large proportion of sales and profit for the season, are largely still ahead of us, it is not possible to reliably forecast our results.

The outlook for the second half of the year remains uncertain as increasing costs (such as fuel, freight, electricity etc) and the lower New Zealand and Australian dollar puts pressure our trading margins. We will however remain focused on improving our market share and customer experience in the New Zealand and Australia fashion apparel markets in which we operate, and keep a tight control over our operating costs. We will also work to ensure our Glassons and Hallenstein Brothers brands remain market leaders in their respective market segments"

Not exactly positive is it. With Grahger selling down I struggle to see how +ve momentum can be reestablished. I sold half on the way up at $5.50 and some there on the way down and again more recently at slightly lower prices and am now out. That 4% by implication is 4.0% seeing as they have not defined it further. This is quite a big change from 4.8% for the period to 30 November. To move the year to date needle that much in only 9 more trading days implies early December trading has been quite considerably softer than the same 9 day period last year. A sign of things to come for the summer season or just a short term aberration ?...you folks be the judge.

[Arbroath]

Not exactly positive is it. With Grahger selling down I struggle to see how +ve momentum can be reestablished. I sold half on the way up at $5.50 and some there on the way down and again more recently at slightly lower prices and am now out.

When I exited in August between $5.40-$6.00 for the very reasons that are now developing I was told my view of value was less important than the big Aussie fund that was buying at the time. That may of been true short term due to their deeper cheque book but I'm having the last laugh now they have a big holding they can't get out of very easily in a changing environment.

[Beagle]

When I exited in August between $5.40-$6.00 for the very reasons that are now developing I was told my view of value was less important than the big Aussie fund that was buying at the time. That may of been true short term due to their deeper cheque book but I'm having the last laugh now they have a big holding they can't get out of very easily in a changing environment.

Indeed, it is sometimes a real advantage having a smaller holding that can be more readily liquidated. I wouldn't be entirely surprised to see this with a 3 something handle in due course. Might be very good buying again then