The Premier Investments Limited (ASX: PMV) share price is up over 10% after the retailer gave an update.
Premier Investments sells products through a number of brands including Smiggle, Jay Jays, Just Jeans, Peter Alexander and Dotti.
Premier Investment trading update
The company has given an update for the 26 weeks ending 25 July 2020, being its FY20 second half.
Premier Investments said that global sales were $484.2 million which was down $106.5 million or 18% on the second half of FY19.
However, despite the headline drop in sales and related decline in gross profit. Premier’s online sales and EBIT growth (click here to learn what EBIT means) continued to accelerate and deliver record earnings according to the company.
The company saw online sales of $123.3 million in the second half, up 70% compared to the prior corresponding period. Online sales made up around a quarter of Premier Retail’s total sales. The online sales deliver a “significantly” higher EBIT margin than the EBIT margin of the retail store network.
Premier Retail is now expecting FY20 second half EBIT to be between $58.7 million to $59.7 million. This would be growth of 9.7% to 11.7%.
Therefore, FY20 EBIT is now expected to be between $184.8 million and $185.8 million – up 10.5% and 11%.
It’s impressive that Premier Investments has done so well during this period despite its store network shutting. I think it shows the benefit of having really good retail websites so that customers can continue to shop.
I believe that Premier Investments is one of the best ASX retail shares. However, I’m not sure how much of this growth is due to stimulus – 2021 will be very interesting! With the strength of the Premier Investment share price recovery, I think there are other ASX growth shares and ASX dividend shares I’d rather buy first.