The Best&Less update stands in contrast to more upbeat recent trading reports from larger retailers including JB Hi-Fi and department store Myer,which confirmed on Tuesday it was expecting a jump inhalf-year profits of up to 104 per cent after a very strong Christmas and Boxing Day sales period.
But Australian Bureau of Statistics consumer price index figures released on Wednesday confirm households on tight budgets are under increasing pressure,with 12 month inflation hitting 7.8 per cent,its highest peak since 1990.
Best&Less told investors on Wednesday it has seen a 13.4 per cent jump in total sales for the first half the financial year to $324.8 million,but online sales dropped by 29.8 per cent. The company is now expecting to report a net profit of $13.7 million for the half – a 31 per cent drop on the result for the same time last year.
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The group said it would open six new stores in the coming months and was working to implement cost-saving initiatives to match the current trading environment.
“While we are cautious on the near-term macroeconomic outlook,our vertical model and the deep retail sector experience of our team gives us the ability to respond and adapt rapidly,” chair Jason Murray said.
Best&Less group shares opened lower and closed down by 6.6 per cent at $1.97.