Briscoe Group Reports Improvement In Third Quarter Sales

Briscoe Group has reported improving sales growth in its third quarter, though costs from a new distribution centre and a technology upgrade will weigh on this year's profit.

Third quarter sales for the 13 weeks ended October 25 rose nearly 2 percent to $174.4 million on the year earlier. Group sales for the nine months to October 25 were up about 1 percent to $548.6 million.

"With the critical fourth quarter now underway, our focus remains firmly on maintaining this momentum, managing inventory and costs carefully, and continuing to strike the right balance between sales growth and margin performance," managing director Rod Duke said.

Operating costs tied to the new North Island distribution centre and a technology investment will hit current-year earnings, ahead of benefits expected from both projects.

"We anticipate these benefits will become increasingly evident during the 2027/28 financial year," Duke said.

"While we are encouraged by the improvement in sales momentum and gross profit performance, profitability continues to be impacted by the challenging retail environment."

Elevated fuel prices were affecting consumer confidence and operating costs, while discretionary spending remained subdued.

"Continued pressure on the New Zealand dollar is adding to cost challenges for retailers, while uncertainty surrounding the general election may also have contributed to further consumer caution," he said.

Rebel Sport saw sales growth of nearly 4 percent for the third quarter, following growth of 4.8 percent in the second quarter. Briscoes homewares' sales turned positive with an increase of 0.82 percent for the quarter, compared with a drop of more than 2 percent in the second quarter. The online business also delivered sales growth of nearly 6 percent (5.77 percent)..

"While consumers remain cautious with discretionary spending, it is encouraging to see an improvement in this segment and positive sales growth across both brands as we head into our most important trading period," Duke said.

"Most notably, gross profit performance continued to improve during the quarter, extending the trend of progressively narrowing the decline in gross profit percentage relative to the prior corresponding periods, as reported throughout last year and during the first half of this financial year," he said.

"In a market which remains extremely promotional, the progress being made in gross profit performance alongside positive sales growth is particularly encouraging."

Duke expected to report a full-year net profit of up to $55 million, depending on the fourth quarter, which is the peak season for consumer spending. That compares with $59.2 million the year earlier.

"While we remain cautious about the broader consumer environment, we believe the investments made across the business position the group well to deliver improved operating performance as their benefits become more fully realised."