Briscoe Faces Margin Pressure Despite Sales Growth and Inventory Gains
Briscoe Group Limited reported a 2.07% increase in second quarter sales to $192.9 million, with online sales approaching 20% of total revenue. Despite ongoing economic challenges, the company expects a net profit after tax of at least $29 million for the first half of 2025.
- Q2 sales up 2.07% to $192.9 million
- First half sales slightly below last year at $371.3 million
- Online sales share grows to nearly 20% of total group sales
- Net profit after tax expected not less than $29 million for H1
- Inventory levels reduced compared to last year
Briscoe Group Navigates Tough Retail Environment
Briscoe Group Limited has delivered a modest but welcome sales increase in its second quarter, reporting $192.9 million in revenue, up 2.07% from the same period last year. This marks a rebound from a challenging first quarter and reflects resilience amid a subdued consumer spending environment in New Zealand.
Group Managing Director Rod Duke highlighted the contrasting performance between the company’s two main segments. Homewares experienced a solid bounce back with nearly 4% growth, recovering from a slow start to winter and timing issues with promotional events. Sporting goods, however, saw a slight decline of 1.34%, a segment more sensitive to discretionary spending pressures.
Online Sales Gain Momentum
One of the standout trends is the continued growth of Briscoe’s online channel, which now accounts for 19.36% of group sales in the first half, up from 18.77% last year. This represents a 2.92% increase in online sales, underscoring the importance of digital transformation in retail. The company is preparing to launch a new online platform in August, promising enhanced functionality and improved customer experience, which could further boost this channel’s contribution.
Profitability and Inventory Management Under Pressure
Despite the sales growth, Briscoe faces margin pressures amid the broader economic downturn. Gross profit margin remains a key focus as the company navigates cost challenges. Encouragingly, inventory levels are lower than the previous year, reflecting disciplined stock management ahead of the new distribution centre’s completion in Drury, which remains on schedule and within budget.
Interest income has declined by around $2 million compared to last year, impacted by lower interest rates and reduced cash balances due to capital expenditure on the distribution centre. Nevertheless, Briscoe expects net profit after tax for the first half to be not less than $29 million, with optimism that the second half will see improved profitability as economic conditions gradually recover.
Looking Ahead
The company plans to release its full half-year results on 10 September 2025, including an interim dividend declaration. Investors will be watching closely to see how the new online platform and distribution centre investments translate into financial performance in the coming months.
Bottom Line?
Briscoe’s steady sales growth and digital push set the stage for a potentially stronger second half amid ongoing economic headwinds.
Questions in the middle?
- How will the new online platform impact sales growth and customer engagement?
- Can sporting goods segment recover as consumer discretionary spending improves?
- What margin pressures might emerge as inflation and supply chain costs evolve?
