Shares in the parent company of Smiggle and Peter Alexander fell to a year-and-a-half low after a disappointing earnings outlook, underpinned by consumer cost-of-living woes.
Premier Investments shares dropped 9.8 per cent to $15.74 by midday on Friday, after the retailer said it expected to report around $120 million in underlying earnings before interest and tax for the 26 weeks to January 24.
That's about 18 per cent lower than consensus estimates, according to RBC Capital Markets analyst Michael Toner.
It's also below the $129.4 million in earnings Premier reported for sleepwear seller Peter Alexander and kids stationery and school goods retailer Smiggle for the first half of 2024/25.
"Discretionary spending remains under pressure, with consumers cautious due to the ongoing cost-of-living impact," Premier Investments executive chairman Solomon Lew told shareholders at an annual general meeting in Melbourne on Friday.
Despite the challenging environment, sleepwear brand Peter Alexander delivered record sales across the Black Friday and Cyber Monday shopping period.
"That said, we do not underestimate the significance of the December/January trading period, which is ahead of us, which is a critical driver for the group’s first-half result," Mr Lew said.
"The group is well prepared for this important trading period ahead."
Premier also announced on Friday it would spend up to $100 million from its strong balance sheet on share buybacks over the next 12 months.
Premier had $333.3 million in cash on hand when its financial year ended on July 26, and also owns 25.4 per cent of appliances maker Breville, an investment worth about $1.1 billion.
Mr Lew said it was also reserving cash to take advantage of opportunities that may arise and would continue to review its dividend and capital management strategies.
Premier sold its Apparel Brands, including Just Jeans and Jay Jays, to Myer in a transaction that completed in January.
