First half earnings growth of 5.5% to $196.4m was in line with Macquarie’s expectations for Premier Investments. Despite a challenging environment in the half, like-for-like sales growth of 8.9%, including 27.3% growth in higher margin online sales, drove the result.
The company also benefited from improved performance from its higher gross margin brands, including Smiggle.
With challenges including inflationary pressure and elevated freight costs expected to continue, the broker decreases expected full year earnings per share -1.6% to account for conservatism towards margins.
The Outperform rating and target price of $35.00 are retained.
Sector: Retailing.
Target price is $35.00.Current Price is $28.94. Difference: $6.06 – (brackets indicate current price is over target). If PMV meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
