HLG - Hallenstein Glassons Holdings

[Waltzing]

Looking good for 7 dollars as predicted by WINNER().

[LoungeLizard]

Solid result I think, and bang in line with our resident HLG guru's prediction.
 
The results for AUS are particularly positive going forward, and as noted now accounts for nearly half of HLG's sales. That's from only about 5 stores compared to the 42 in NZ! If HLG can continue to grow their AUS market share only fractionally each year, which they have been doing, the future looks very bright, regardless of any potential downturn in the NZ market. Glassons NZ is probably near the bottom of the cycle - once things pick up again here, there could be some pretty stunning results coming down the line.

The yield in the meantime is one of the best around, and HLG's divvy record is second to none. Very happy to see this a long term hold.

[winner (n)]

I think i said X would be 11% but jeez it was 13.9% .....Group sales for the first eight weeks of the winter season are +13.9% ahead of the same period last year.

But heck I've never seen them so gloomy - Whilst this is a pleasing start, significant challenges are expected to continue for the remainder of the season given the current economic environment in New Zealand, Australia and globally.

Think they been reading too many economic commentator reports

[winner (n)]

Costs must be a real concern - 18% higher ($14.7m)  than last year and even 13% more than H222. Wage bill now about 40% higher than 3 years ago pre pandemic is a worry

I'm glad they said ' Cost efficiencies are being made where possible.' - keep increasing at current rate and H2 profit might not be as good as some expect

[Basil]

Yes sales 2H to date exceeded my own internal expectations, (mid to late single figures percentage increase), so 13.9% increase period to date is very encouraging in the depths of a cost-of-living crisis and recession in N.Z. 

I really like their very cautious, disciplined and prudent approach.
Australian capex in the half was $5.5m of a total of $7.9m its clear they know that Australia is where the real growth is.

Costs are a function too of not just inflation but store expansion over the years Winner.  I am very happy with the way they are running the business and its good they try and do so efficiently without any unnecessary ESG grandstanding like many companies do.

Our resident Lizard has (temporarily?), put me off getting a coat for Tony the Pony so I will see how his own natural coat fills out as we head into winter.  We often come across 30-40 dogs running free in the stunning Craigavon park which is incredibly well set up for dogs and he certainly commands a lot of respect with his beautiful tan coloured coat and substantial size so I wouldn't want to change that.  He runs free everywhere in that park so that generates a lot of natural body heat anyway.  I will have to think about some other things to spend the dividend on.   (Secretly I wanted to get matching coloured coats for Tony and I so all the lovely ladies walking their dogs I come across might think I am a handsome boy too but alas, I am to old now for such attempted folly).   Hope Mrs Beagle doesn't read this post lol

[winner (n)]

Glassons AU key to future profit and dividend growth

They still eeking out share gains and now 0.82% (low penetration as basil says eh)

In 6 months to Jan 23 period 'market'up 15% on six months to July 22 but Glassons up 21%

So keeping watch on ABS Retail data will be a good guide to how Glassons are progressing - no doubt the next we'll hear from HLG is sometime in August

Anyway heres a chart of Glassons AU share

You cannot view this attachment.

[Whome]

But heck I've never seen them so gloomy - Whilst this is a pleasing start, significant challenges are expected to continue for the remainder of the season given the current economic environment in New Zealand, Australia and globally.

I think more 'cautious' rather than 'gloomy' - words that insulate against the global effects of inflation and interest rates that may not have peaked yet - careful words to show they are mindful of the broader economic environment while executing a carefully crafted growth plan.

[KW]

Wage bill now about 40% higher than 3 years ago pre pandemic is a worry

That's what happens when the minimum wage goes up 44% in 6 years.  

[KW]

Our resident Lizard has (temporarily?), put me off getting a coat for Tony the Pony so I will see how his own natural coat fills out as we head into winter.  We often come across 30-40 dogs running free in the stunning Craigavon park which is incredibly well set up for dogs and he certainly commands a lot of respect with his beautiful tan coloured coat and substantial size so I wouldn't want to change that.  He runs free everywhere in that park so that generates a lot of natural body heat anyway.  I will have to think about some other things to spend the dividend on.  (Secretly I wanted to get matching coloured coats for Tony and I so all the lovely ladies walking their dogs I come across might think I am a handsome boy too but alas, I am to old now for such attempted folly).  Hope Mrs Beagle doesn't read this post lol

You live in Auckland, it doesnt get cold.  Only tiny, shivery chihuahuas should wear clothes.  And greyhounds.  Get him a flash bandana or bow tie.  Or really splash out and get him some Tiffany jewellery like mine have :-)

[Basil]

Glassons AU key to future profit and dividend growth

They still eeking out share gains and now 0.82% (low penetration as basil says eh)

In 6 months to Jan 23 period 'market'up 15% on six months to July 22 but Glassons up 21%

So keeping watch on ABS Retail data will be a good guide to how Glassons are progressing - no doubt the next we'll hear from HLG is sometime in August

Anyway heres a chart of Glassons AU share

You cannot view this attachment.

Anyway you slice and dice it, that's very solid growth in market share in Australia over the years and very encouraging for the long term prospects for holders.  Just got to get through this recession and we will live to see even happier times.  In the meantime, posting record profits and dividends as we scrape along the bottom of this economic cycle certainly commands my respect!

Sales 2020 $288m, estimated FY23 $400m+ up ~ 40%
Materially bigger retail footprint in FY23 than FY20 so increased wages bill is understandable.

[Clearasmud]

Glassons AU key to future profit and dividend growth

They still eeking out share gains and now 0.82% (low penetration as basil says eh)

In 6 months to Jan 23 period 'market'up 15% on six months to July 22 but Glassons up 21%

So keeping watch on ABS Retail data will be a good guide to how Glassons are progressing - no doubt the next we'll hear from HLG is sometime in August

Anyway heres a chart of Glassons AU share

You cannot view this attachment.

Thanks so much for that chart Winner.
Is that the share of total retail clothing or woman's retail clothing?

[winner (n)]

Thanks so much for that chart Winner.
Is that the share of total retail clothing or woman's retail clothing?

Total retail clothing (no shoes, accessories etc).  Clothing stores type so doesn't include those department stores that sell clothes

Best market proxy I can come up with

HLG don't disclose Hallensteins AU sales so can't do a group share

[Perky]

I was a little surprised how much their group online sales % dropped.
From 33% to 18% is quite some drop. Not far off a 50% drop.
Moved a lot of cost efficient online sales to more expensive store sales.


Unfortunately the wage costs for Hlg and other similar minimum wage businesses in NZ went up again today.

They seem to have unlocked the secret sauce for glassons australia so whilst the short term might be a few headwinds once the good times come again they should do well expanding into the bigger market if their designers can keep giving their customers what they want.

GLTH

[Basil]

People are obviously really happy to be out shopping in the stores again after the misery of all the Covid lockdowns.

[winner (n)]

Is selling online more efficient (less costly) than seliing in store for retailer that operates in both channels?