StockTalk

This thread started in 2023. Even after 3 years, investing in overvalued property and stocks with  historically high stock prices carries high risk. Exceptions are hidden gems (overlooked stocks with a combination of above-average income, growth, and great value).

https://www.nzherald.co.nz/business/markets/shares/nz-sharemarket-continues-downward-trend-down-15-for-the-week-market-close/premium/ZJWY3CLFPNBJLLJTLE3VCPOGPQ/

Transtasman clothing retailer Hallenstein Glasson surged 90c or 8.37% to a record $11.65 after telling the market that group sales for the year ending August 1 increased 19.6% to $563m, benefiting from a strong Australian dollar. Net profit is expected to be $83m-$84.5m, up about 43.5%.

Matt Goodson of Salt Funds Management said Hallenstein Glasson made "a staggeringly good update. Hallenstein's core focus is on the basics and not taking a fashion risk, and they just keep on executing."

I think Craigs and Forsyth Barr analysts will agree.

Quote from: Ferg on Aug 29, 2026, 09:03 AMOh dear....and his hurried departure was for "health reasons".  Do we know any more details about the intended changes to the benefit of minority shareholders?

So if (when) the share price tumbles futher on this news will the NZX/ASX regulators ask for a "please explain" from the board as to why they misled investors about the reason for his departure? They obviously knew what was coming and its hard to see how they could justify misleading shareholders for something that is obviously price sensitive?

No.
I sent emails to The Chairman Rewi Bugo and Brent King.
There was an amended Annual Shareholders Meeting 2026 Results., .
2 — Re-election of Director 18,780,733 32,133,645 1,993,721 50,914,378 Not Carried
Not Carried.? Extraordinary.
I had a polite reply from Brent King who just stated more shareholders voted against his reappointment as a director than for it.
This was after  in the notice of meeting the directors stated they supported all resolutions.I note The Chairman through his Borneo Capital Ltd holds 31,730,479 shares.
So far no reply from The Chairman.
Like all shareholders I would like to know what, and why, and werefore.
The big surprised to me is there has been no adverse reaction in the share price.
 

The other thing I didn't like about STU was {IIRC} they were a party to lobbying Government to put in place higher duties on alu-zinc coated steel coming out of South Korea under the guise of "anti dumping" a few years ago...AFAIK they were not dumping their coil onto NZ shores, rather it was a competitive price which was a reflection of SK production volumes and methods.  But this is the old school way of getting Government intervention when you can't compete.

That said, it is a shame we have lost a lot of production capacity in NZ over the years....but with multiple middlemen, overly onerous H&S practices, high minimum wages and a tendency to CYA practices.....it's not really a surprise NZ can't complete with materials coming out of Asia.  Not that I propose a wholesale slashing of minimum wages and elimination of all H&S - but there needs to be a happy medium without so much ass-covering and profiteering.

I can't wait to see the balance sheet and cash conversion of this growth.  Unlike many retailers (and other businesses) that need to continually reinvest cash to support growth, HLG's growth is highly cash generative, meaning a significant proportion of the earnings uplift should ultimately be available for dividends, or further expansion.

Nice situational buying lorraina.  Reminds me of the quote "be greedy when others are fearful".

Do we know much more about the apparent conflict and why the motion was not carried?  If the other Directors did not support the major shareholder, are there also issues at the Board level and not just between the Chair & CEO?

I think there is a fundamental issue with how they operate....I say this as a consultant to a former STU customer where we imported coil direct from S Korea instead of buying locally.  We wanted to buy locally but the T&Cs for buying from STU were onerous, and their prices were high.

If we look at p12 of the 2026 annual report there is a section titled "5 minutes with the National Pricing Manager".  I am purposely not using his name because it is not his fault - I imagine he is working with the cards he has been dealt.  Please read that page.  It sounds like the role is central to how STU makes money - a commerical role that sits between demand and supply.

What stands out for me is this quote: "We take a tiered approach that reflects purchasing history, long-term relationships, and volume commitments...".  That was in the context of "What influences pricing decisions?"  {emphasis added  by me}

Imagine rocking up to New World or Pak n Save and looking to buy toothpaste and they won't sell to you unless you first agree to a purchasing commitment for a particular brand, size and flavour for the next 12 months.  That is what it is like.

I reckon they do this to have long production runs for efficiency purposes...they bang out say 120 tonnes of what you want and you commit to buying 10 tonnes per month while they hold it for you.  That is very old school practice and IMO lies at the heart of why they struggle.  I don't know this for a 100% fact - I am surmising and joining dots based on my own experience and that quote above.

10 year EPS CAGR of 15% and very low level of store penetration in Australia speaks for itself as does a forward PE of only 10.4 and gross yield of approx 9%. A PEG of only 0.75

Those are numbers that very rarely go together.
Huge runway of growth in the decades ahead.
How much more proof of growth do some investors need ?  15 years, 20 years ?

Mark says

Inventory continues to be managed prudently to ensure best use of working capital, with year-end inventory at $111.0m (FY25: $113.6m). The number of SKUs has been reduced, with a shift to higher value, higher demand products and active management of old, obsolete and excess inventory lines.

Customer says

"They run out of A items all the time and have forced me to deal with competitors like Vulcan. I'm in Auckland and I often get deliveries from their branches as far away as Christchurch, because they don't have the stock in Auckland. It must be costing them a fortune as they pay the freight cost. Not good for me though as some times it's damaged so I leave it on the truck. When I order from Vulcan I get my items in one delivery and they don't seem to run out of the important lines". I'm ordering less and less from Stu which is a shame because Stu are much cheaper.....