A chain of designer sleepwear stores has delivered its best sales ever despite the cost-of-living crunch, as its owner continues to reposition its sister business of back-to-school stores.
Parent company Premier Investments, chaired by retail sector stalwart Solomon Lew, reported annual sales of $795.5 million for fiscal 2026, down two per cent from the previous year.
But most of that came from Peter Alexander, where sales rose 3.2 per cent to a record $565.3 million, while Smiggle sales fell 12.9 per cent to $230.2 million after 13 per cent of the kids' stationery and school supply stores were closed.
"We've had a record 12 months at Peter Alexander, and we can't do much more than produce a record in very difficult times," Mr Lew told reporters during an earnings call on Thursday.
Conditions in the discretionary retail sector were very challenging, particularly in the latter months of the second half, the company noted.
Overall, the group made a net profit after tax of $129.2 million in the year ended July 25, down 10.3 per cent year-on-year.
It maintained a strong earnings margin of 22.1 per cent, with a gross margin of 65.2 per cent.
The group closed 29 Smiggle stores during the period and opened just one, taking its store network to 268, with 141 located in Australia and New Zealand.
Premier is attempting to reset the Smiggle brand and refocus on children aged six to 12, after drifting towards even younger children under its previous management.
"We've repositioned the business, we're restocking the stores, we've done some cosmetic changes to shelving and bays and the way we've done zoning for the various ages," Mr Lew said.
Premier plans to open a large new flagship Peter Alexander store in the Sydney CBD in October, and to relaunch at 24 Myer stores from August 2027.
RBC Capital Markets analyst Michael Toner said Premier's results were in line with expectations and it was demonstrating solid cost control, with employee expenses, rent and advertising costs falling.
Premier will pay a final dividend of 36 cents per share, taking its full-year payout to 81 cents.
In the first seven weeks of the current financial year, Premier's sales and gross profit were very close to what they were in fiscal 2025.
"Obviously we're primed for Black Friday, Christmas and back-to-school," Mr Lew said.
"We are in stock, and our products are here. Or if not here, a couple of days away."
Promotional windows would be installed shortly.
Premier shares were up 8.7 per cent to $12.11 in afternoon trading on Thursday.
