Noni B first half profit drops 19 per cent
Market watch top headlines
Womenswear retailer Noni B has reported a first half results plunge of 19 per cent but is confident of an earnings turnaround.
Noni B on Wednesday reported an after-tax profit of $1.9 million for the half year to December 30, down from $2.4 million in the first half of 2012.
Sale revenue was $62.5 million, compared with $62.4 million in the previous corresponding period.
Despite the disappointing result, joint managing director David Kindl was confident earnings would recover in the second half.
"The women's fashion market remains challenging, and we continue to manage the business as efficiently as possible, without compromising the service and quality that will provide long-term growth," he said.
"As consumer demand recovers, we are confident that our investment in improving customer service, the superior style and fit of our products, the convenience of our national store network and web store and the strong Noni B and Liz Jordan labels will enable us to return to sales and earnings growth."
Shares in the fashion retailer jumped three cents, or 3.9 per cent, to 80.3 cents at 1048 AEDT.
The company expanded in the first half to 219 stores, with five new stores opening and one underperforming store closing.
The level of inventory, at $17.2 million, was in line with the previous half year even with the increase in the number of stores.
A new label, NONI +, was launched online for fuller-figured customers, and would be introduced in bricks and mortar stores in 2013.
Mr Kindl said second half revenue will include contributions by new stores in Perth, Melbourne, Sydney and Brisbane.
He also said lease renewals would depend on negotiating satisfactory commercial terms, and in many cases Noni B was achieving rent reductions.
During the half year, 50,000 new members joined Noni B's loyalty club, which Mr Kindl said continued to be a strong contributor to the business.
The company has declared a fully franked interim dividend of 2.5 cents per share, unchanged from last year.