Specialty Fashion soars on profit guidance
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MELBOURNE, Jan 25 AAP
January 25 2013, 10:42AM
Shares in Specialty Fashion Group have soared more than 40 per cent after the womenswear retailer said it expects its first-half profit to nearly triple due to cost savings and improved sales.
At 1037 AEDT on Thursday, shares in Specialty Fashion were 29.5 cents, or 42.14 per cent, higher at 99.5 cents in early trading on the Australian Securities Exchange.
The owner of the Katies and Millers fashion stores said on Friday that it expected its net profit for the six months to December 31 to be in the range of $17 million to $18 million.
The guidance represents a significant increase from the company's $6.2 million profit posted in the corresponding period last year.
"Our continued focus on our strategies to improve sales, margins and costs of doing business has meant we have delivered a significant turnaround in trading performance," chief executive Gary Perlstein said in a statement.
"The economic uncertainties and structural changes affecting retail have not gone away, but we have pulled all the levers within our control to achieve sustainable improvements and our results reflect this."
Sales in the group's 892 stores in the six months to December rose two per cent on the prior corresponding period, and revenue lifted 1.3 per cent to $311.2 million.
The company said a major contributor to the profit growth was changes made in the company's supply chain, which delivered reduced product cost prices and freight costs, Mr Perlstein said.
Falling cotton prices had also reduced the cost of fabrics, he said.
Specialty Fashion Group is due to release its finalised first-half financial results on February 18.