HLG - Hallenstein Glasson

[Jaa]

While I see clothing internet sales growing, I don't think it will become the nextbigthing for quite some time at least (and HLG have every opportunity to maintain their position, also on the internet) Why? Buying some generic good like electronics on the net is fine, you know what you're getting. But with clothing, you order a medium and it is more like a small, so you have to return it. The large arrives but it sits funny and looks stupid so you decide to go for a different style altogether. That item then looks like a different colour to the photo, back it goes. My point being for stuff like clothing and shoes it's easier to just pop into the store and get what you need, unless you have a month and time to courier back and forward.

Buying clothes online has been a big thing for a long time. I remember 10 years ago there was a craze of people buying and selling second hand clothes on trademe!

It is one reason H&M et al. invests so heavily in their flagship stores. They help build brand presence and credibility for their online channel. No need to build a store in every town like HLG have done.

[nextbigthing]

Buying clothes online has been a big thing for a long time.

Then HLG have dealt with it well (judging by their consistent results).

[nextbigthing]

My wife ordered a number of items from Ezi-buy one Friday morning.
The order arrived the next morning,ie Saturday morning.
All items fitted her perfectly,and all were what she wanted.

Long story short, I purchased some flash shoes online, 3 attempts to get the correct item in good order to me was only sorted by going to a store!
So I guess execution is the key. Hallensteins have been delivering results for years.

Percy I'm glad to hear you wife shops at Ezibuy and not HLG

[TheHunter]

While I see clothing internet sales growing, I don't think it will become the nextbigthing for quite some time at least (and HLG have every opportunity to maintain their position, also on the internet) Why? Buying some generic good like electronics on the net is fine, you know what you're getting. But with clothing, you order a medium and it is more like a small, so you have to return it. The large arrives but it sits funny and looks stupid so you decide to go for a different style altogether. That item then looks like a different colour to the photo, back it goes. My point being for stuff like clothing and shoes it's easier to just pop into the store and get what you need, unless you have a month and time to courier back and forward. Meaning HLG are quite safe IMHO and I hold in my diversified dividend portfolio. I like that clean balance sheet with no debt.

Why on earth anyone would want to buy some of the C*@p they sell, like the super tight chino pants that only go 3/4 way down your leg is beyond me*1, however I'm quite happy to profit from those who desire to dress like they're not quite right upstairs.

*1 sorry to anyone who wears Hallensteins supertight chinos*2


*2 Actually I'm not sorry at all. You look stupid, but thanks for your money.

You sound like the type of chap who wears croc's.

All will be revealed tomorrow, I'll have a punt and expect solid performance from Glassons with Hallensteins tracking along nicely and an increased final divi.

[Beagle]

Solid result with profit and sales inline with consensus forecast. Dividend slightly higher than consensus forecast. Outlook comments are concerning. Sales in the 8 weeks since balance date up 4% but at the expense of margin. Intense competition and comments regarding the lower $A and $Kiwi hurting margins and very limited ability to increase prices mean the outlook is clouded.

My read is profit will be lower in FY16. The $Kiwi and $A have fallen substantially and its clear that as the effect of this plays itself out in FY16 and beyond profitability in an intense retail environment will come under pressure.

This is a very well managed company with a very strong balance sheet, excellent stock management and well defined market niche but the currency headwind which is quite strong now and sluggish economy / retail environment means profit growth is extremely difficult and I can see analysts pulling back on forecasts for FY16 and beyond. Awesome dividend yield but I see the pay-out potentially coming under pressure. Note current pay-out of 31 cps slightly exceeds EPS. I think there's some risk to the downside at present for the SP.

http://www.sharechat.co.nz/article/7...ueeze-seenhtml

[Joshuatree]

Been buying socks recently , very nice ones too.3 pairs for $10 to go with my $10 Tshirts.Staff keep rearranging the store layout and i see suits for $199 including dress shirt and tie.Often I'm the only one loitering in the shop.Margins look slim alright.

[Beagle]

Its a little surprising that the market hasn't reacted to what is clearly a challenging outlook statement by the company. Analysts still crunching their numbers and investors waiting to be spoon fed what appears to be quite obvious or am I missing something ?

[TheHunter]

I think concerns about this is what drove the SP back down from when it approached $4, so I'd say it was already priced in to some extent.

[James108]

I agree with hunter. No suprises for me on forward outlook.

Do you still hold Roger?

[Arbroath]

I have a model of the last 10 years earnings/margins/cots etc and my FY2016 "guestimate" if the NZD stays around US60-65c, and factoring that costs have been rising from the low 40s to high 40's as a percentage of gross sales the past 6-7 years, is that they should make NPAT of around $15m. If they do that then at $3.45 they are on a PE of 13-14. Hard to see too much upside at the moment but with a 100% pay out ratio and a solid long term track record worth holding IMO - would still yield 10% gross in that scenario next 12 months, and have yielded 12% gross over FY15 so the dividends keep de-risking your investment.