Hallenstein (NZX:HLG): How did Hallenstein Brothers segment perform in annual results?

Highlights

• Hallenstein witnessed a 21.9% rise in the Group sales to $350.76 million for the year to 1 August 2021.
• Sales of Hallenstein Brothers from the group rose in the period on pcp with growth in casual categories.
• HLG continues to face store closures amid COVID-19 outbreaks in Australia and New Zealand.

Hallenstein Glasson Holdings Limited (NZX:HLG) released its full-year results in September for the period ended 1 August 2021.

Hallenstein Glasson is a men’s and women’s retailer in Australia and New Zealand that operates stores under names, Hallenstein Brothers and Glassons. It also sells products through its e-commerce platform.

Image source: © 2021 Kalkine Media New Zealand Ltd, Data source- EODHD/Others

The Group sales showed a 21.9% increase to $350.76 million and a 20% rise in audited NPAT to $33.32 million for the period compared to pcp. The Group’s online sales increased 31.27% in the period on pcp with substantial growth witnessed during the periods of store closures.

The Group’s brands witnessed strong growth with all its stores well stocked as stores reopened after 2020 lockdowns. HLG’s launch of Glassons App and the US website to sell directly to US-based customers supported growth in online sales all through the year.

ALSO READ: Could these 4 attractive NZX 50 stocks make you rich?

However, many factors like challenging freight costs amid the COVID-19 pandemic and unfavourable exchange rates with the US dollar in both New Zealand and Australia resulted in a drop in gross margin.

Hallenstein Brothers’ performance

Hallenstein Brothers’ sales saw a rise in pcp with casual categories seeing the major growth. Consumer habits shifted from more formal dressing to casuals amid COVID-19 and the business has been able to pivot and adapt suitably.

RELATED ARTICLE: Hallenstein Glasson (NZX:HLG) Lifts Profit By 28%

The group’s sales experienced a 9.86% rise to $97.2 million and a 7.5% increase in NPAT to $4.82 million for 12 months period on pcp. Stores in Napier and Taupo were revitalised during the year and new fittings to better present product were done to key stores.  

The product remains to be essential for the Group’s performance along with improved product quality and sustainability.

ALSO READ: Which are 3 popular NZX penny stocks in 4th Quarter of 2021?

After NZ stepped into Level 4 lockdown on 17 August 2021, all Hallenstein Brothers and Glassons stores in New Zealand were closed. However, stores outside Auckland reopened after the Group entered into a level 2 lockdown on 8 September.

ALSO READ: Why to look at these 4 NZX-listed dividend stocks in Q4?

Twelve stores in Victoria and 14 stores in New South Wales have been shut down since limits were placed on the states in early 2021.

Road ahead

Stores in New South Wales and Victoria are expected to reopen in October and November, respectively, while the reopening date of Auckland stores is still not certain. HLG also expects that its profitability will also be impacted in the period in contrast to the period just completed.

The Group will provide the next update in the Annual Shareholder Meeting in December 2021.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)