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Highlights
- Premier Investments expects 1H25 sales to decline year-over-year, with Bell Porter projecting a 10%-12% drop in international sales.
- Smiggle faces headwinds due to its high exposure to offshore markets, while Peter Alexander shows steady momentum.
- Bell Porter lowers its price target to AU$34 but retains a "buy" rating, citing long-term growth potential despite near-term challenges.
Shares of Premier Investments Limited (ASX:PMV) fell 0.7% on Tuesday to close at AU$27.21, retreating from an early-session high of AU$27.84. The decline follows adjustments to full-year revenue estimates by brokerage Bell Porter, which cited higher costs and anticipated weaker international sales.
Key Updates
Premier Investments announced that global sales for its retail brands, including Peter Alexander and Smiggle, are expected to range between AU$855 million and AU$865 million for 1H25. This marks a decline from AU$879.5 million reported during the previous corresponding period (pcp). Bell Porter projects a 10%-12% decline in international sales for 1H25, largely due to Smiggle’s ~60% exposure to offshore markets.
While Smiggle faces challenges, the Peter Alexander brand has demonstrated resilience, with Bell Porter forecasting mid-to-high single-digit sales growth for the first half of 2025.
Bell Porter estimates a net profit after tax (NPAT) decline of 10% in FY25, followed by declines of 9% in FY26 and 8% in FY27.
Brokerage Insights
Bell Porter trimmed its price target for Premier Investments from AU$38 to AU$34 but maintained a “buy” rating on the stock. The brokerage emphasized the potential for growth in Peter Alexander sales while acknowledging near-term pressures on Smiggle's international markets. According to LSEG data, four out of 11 analysts rate Premier Investments as a “buy” or higher, while seven maintain a “hold” rating. The median price target among analysts stands at AU$31.
Market Reaction and Performance
Premier Investments shares have fallen 15.4% year-to-date, including Tuesday’s decline, underperforming the benchmark ASX 200 Index, which is up 1.1% YTD.
The stock’s underperformance has been driven by concerns about weakening international sales, rising costs, and subdued profit growth forecasts.
