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A decision to boost inventories for the high-demand Summer sales periods has paid off for retailer Premier Investments (ASX: PMV), with group profits rising by 88.9 per cent in the first half and earnings exceeding guidance.
The company's chairman Solomon Lew describes the achievement as "outstanding", with the results boosted by record sales for pyjamas brand Peter Alexander.
NPAT was up nearly 90 per cent to $188.2 million, while global sales rose by 7.2 per cent to $784.6 million.
The company's earnings also rose by 88.5 per cent to $237.8 million, beating guidance provided in January 2021 by $4 million.
"Throughout this devastating COVID-19 global health crisis, our absolute priority has and continues to be the safety and wellbeing of our teams and customers," chairman Lew said.
"To have delivered these record results in a very difficult and volatile environment is a truly outstanding achievement."
CEO Mark McInnes says the decision to boost inventories for the summer sales period has continued to pay off into the second half.
"In the midst of a global pandemic and despite the considerable uncertainty at the time, we made the critical decision in mid-2020 to invest in increased inventory for the key summer, Black Friday, Christmas and January sales period," says McInnes.
"This decision ensures we were in-stock to deliver significantly higher sales and gross margin in 1H21.
"The same inventory investment and in-stock strategies have continued into 2H21 and are providing a foundation for the sales and gross margin momentum we are currently experiencing."
Record results for Peter Alexander
Premier Investments' pyjamas brand Peter Alexander has chalked up record sales results in the half of $207.7 million, up 43.4 per cent on the prior corresponding period.
The company says the sales result was driven across all product categories, with a long-term investment in children's clothes and plus size attire delivering sales increases of 51 per cent and 67 per cent respectively.
The momentum has continued into the first seven weeks of 2H21, with total sales growth up 46 per cent.
Overall, sales at PMV's apparel brands, including Just Jeans, Jay Jays, Jacqui E, Portmans, Dotti and Total Apparel grew by 18.5 per cent.
PMV's online sales now represent 20 per cent of total group sales after the business delivered record sales of $156.7 million, up 61.3 per cent in the half.
The online channel now delivers a significantly higher EBIT margin than the retail store channel, and strong sales growth has continued online into the first seven weeks of 2H21, growing by 61.9 per cent.
The company was ineligible to claim government wage subsidies from 28 September onwards, but has continued to pay more than 1,500 full and part time team members for their contracted hours whilst they were unable to work.
The retailer says the $15.6 million in JobKeeper it had already received prior to 28 September will be used to pay its workforce should they potential be stood down.
Premier also confirmed that the $15.6 million will not be used in the calculation nor the funding of dividends or management bonuses.
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