HLG - Hallenstein Glassons Holdings

[winner (n)]

9 October can't come quickly enough.  Hopefully Orr realizes the huge damage he's done and cuts by 50 bps.  Frankly, the economy desperately needs that sized cut immediately don't you think ?

You sound a bit down on the economy ....don't listen to the media, it only makes one depressed.

Things aren't that bad

50 bps won't make any difference ...... economy only boom if government stops talking and actually does something productive to get punters busy again

Maybe many need to cheer up

[Waltzing]

lets see how retail goes in the next qtrs to 31 march...

certainly companies that did not have DA act together are being slammed..

the next QTR GDP will tell the story...

RBNZ site one that was hardly visited is now top of the pops...

[KW]

Falcon 9 hit a bit of an air pocket today. Can't help wondering what the overall "one-off" Taylor Swift Era's tour effect has been in the second half.  Literally hundreds of thousands of people attended her concerts in Australia and I am sure many wanted to look as "shiny" as possible doing so. 

I am not making this stuff up.  Investopedia even has a name for it and its well-recognized as having a very strong economic effect.  It's called Swiftonomics.  https://www.investopedia.com/swiftonomics-definition-8601178

Extract the quite material, (in my view), one off effect from that and I suspect the HLG golden goose is not quite as shiny as it appears at first glance but nevertheless, a well-managed company that's navigated the retail recession very well. 

Yes, definitely a factor.  Only need to look at UNI as a comparable.
FY24 Universal Store sales grew +4.0% with a subdued first half trading environment, offset by the recovery and sustained momentum in the second half. On a full year basis, Universal Store LFL sales declined 0.3% (-5.4% in H1, turning to +6.6% in H2). Refining the Universal Store product range in the second half to better meet current customer demands* was key to the improved sales performance throughout the year, with quarter-on-quarter sequential improvements continuing as the year progressed. 

* read introduced Era tour outfits

However, sales momentum has continued into FY25
Sales performance during the first seven weeks of FY25 reveal: 
• US sales up +15.3%, with LFL growth up +12.5%, cycling -9.0% last year6 
• PS sales up +89.9%, with LFL growth up +24.2%, cycling +4.9%6 
• CTC's sales in the DTC channels up +13.3%, with LFL up +22.4%, cycling +4.1%6

[KW]

Contrast that with some of the more mainstream brands in the PMV portfolio (not so much youth focused)

Leaked budgeting and sales documents flowing from the due diligence process now under way between Myer and Mr Lew's Premier Investments, and seen by The Australian, show all of the apparel brands within Premier – Portmans, Just Jeans, Dotti, Jay Jays and Jacqui E – have suffered negative sales growth and collectively are millions of dollars behind their budgeted or projected earnings targets.
According to the documents, Portmans recorded a 10 per cent fall in sales for the winter half to $68.043m, putting it well behind its budget target of just over $75m in sales.
Just Jeans (the largest of the five apparel brands) booked a 0.4 per cent sales fall to $136.326m. Jacqui E had a sales drop of 8.3 per cent to $33.381m to place it well behind its budget while sales at Jay Jays for much of the first 24 weeks of calendar 2024 were down 4.8 per cent to $69.2m, or 4.7 per cent behind budget.

[Waltzing]

another 12 months or more of slog ahead then...

bris up nearly a dollar on the low....

a sell off in retail coming then maybe...

green shoots anywhere?

winner seems to think so

its a toss of the coin then...

[Ferg]

I think this is appalling.  Parties enter into DD in good faith the information won't be leaked to anyone else, let alone the press!  Heads should roll over this.

Leaked budgeting and sales documents flowing from the due diligence process now under way between Myer and Mr Lew's Premier Investments, and seen by The Australian, show all of the apparel brands within Premier  [snip] have suffered negative sales growth and collectively are millions of dollars behind their budgeted or projected earnings targets.

[Basil]

Swifties no doubt helped but momentum building since the concerts in February

Half year to January sales were flat v pcp ...... February / March (Swifties time) sales were up 8% ...but for the whole Feb/July period sales up 21%

The period post Swifties has been enormous ...even better than when Taylor was around

Yeah mate you make a good point. Very strong performance through the depths of the economic cycle. Really makes you wonder how well they will do in the years ahead.  From memory they have a plan to grow to 50 Australian stores. Taylor starts a new world tour next month.

[Waltzing]

looks like the all knowing experts will have to get the scissors out and cut the cloth to suite the budget of the day? They will probably tell the merchants to just cut a bit off the bottom....

https://www.interest.co.nz/economy/129637/statistics-nzs-selected-price-indexes-show-food-prices-rose-just-04-year-august

did someone write in the article 200 BP's off by end of next year?
 
boy thats a NOT lot of BP's....cant be right... 

[winner (n)]

OMG ....Glassons AU sales up 14% ....amazing stuff


https://announcements.nzx.com/attachment/428380.pdf

[winner (n)]

OMG ....Glassons AU sales up 14% ....amazing stuff


https://announcements.nzx.com/attachment/428380.pdf

Even more anazing was Glassons AU sales up 25% in 2nd half ...yep 25% increase

And start of new year looks pretty good too

[Basil]

Outstanding result in normal trading conditions but in arguably the worst retail conditions since the GFC, the results achieved were truly remarkable.  Huge increase in cash on hand at year end "The Group maintains a strong balance sheet with a cash balance of $45.9 million at the end of FY24, up
$13.4 million on the previous year" which puts them in a very strong position for continued store expansion in the current year.  N.Z. sales were more resilient than I expected.  Increased dividend from 24 cps to a record 26.5 cps, (noting just over 75% imputed which is great), is most welcome just before the Christmas holidays and really encouraging in terms of dividend growth in the years ahead.

Looking forward, I've also noted the current exchange rate of 62-63 cents US is significantly better than that which was on average prevailing last year which is supportive of gross margins staying high.  A LOT to like with how resilient this company has been in extremely tough trading conditions, and I am really looking forward to seeing how they perform in the years ahead.  Disc:  I have built back to a solid investment position in HLG over the course of this month.  I see them as an excellent long term hold for dividend income going forward. 

[KW]

Great performance.  Might be time to consider a dual ASX listing?

[winner (n)]

Just for you Basil ...Glassons AU market share trend

Not even 1% of total retail clothing sector innOZ .....imagine the potential

You cannot view this attachment.

[Basil]

Thanks mate, much appreciated.  They now have 38 Glassons Au stores with an ambition for 50 as their first expansionary target.  As you say, there's plenty more room for growth after that.  It's astonishing they have traded so well through the bottom of the retail cycle with the well-known cost of living crisis and ongoing currency and freight headwinds.   I bought a few more today noting the yield with 50.5 cps in annual dividends and assuming 75% imputation level = 50.5 / 0.79 = 63.92 cps gross = 10% gross yield at $6.40 + growth in the years ahead.   That 10% gross will look pretty good when term deposits are only paying 4% in a years' time eh.  (Noting also with that yield a truly impressive track record of outstanding dividends over the past 2 decades +, and no readily apparent cause for concern about the dividend being cut in the future, unlike quite a few other companies on the NZX).  No debt, proven brand value even in extraordinary tough times, stable ownership structure, e.t.c.... lots to like.

[winner (n)]

Forbar guys reckon that a new store generates >20% return on the capital needed to get one going ...that's a good sign