The Premier Investments Limited (ASX: PMV) share price is on watch today as the retail stock released a trading update for FY22 so far.
Premier Investments is the retail business that owns several different retail brands including Smiggle, Peter Alexander, Just Jeans and Jay Jays.
Premier Investment’s trading update
The company wanted to tell investors about its store re-openings and current trading conditions.
Since the beginning of FY22, Premier Retail has been forced to close more than 50% of its global store network for significant periods of time due to government mandated shutdowns.
Premier Investments last updated the market on 23 September 2021 where it told investors that in the first seven weeks of FY22, its sales were down 9.5%.
Since that update, stores in Sydney, Melbourne, New Zealand and the ACT have progressively opened.
It was able to have all of its stores open for the three weeks to 27 November 2021, where sales grew 10.1%.
Management informed the market that for the 17 weeks to 27 November 2021, sales were down 3.5%, a sizeable improvement from the first seven weeks.
Management thoughts on this update
The company said that the company was pleased with how its product has resonated with customers. While there are some important trading weeks ahead, the customer reaction to Premier Retail’s product provides the group confidence for the remainder of the half.
It continues to invest in in-demand inventory, the business has been working on various costs including rent, to ensure strong profitability.
Premier Investments Chair Solomon Lew said: “Our strong balance sheet provides us with the flexibility to take advantage of opportunities for further business investment. We will continue to take a long-term view of the sector and invest ahead of the curve. It is these investments that have given your company great resilience and a significant advantage in very uncertain times.”
My thoughts on Premier Investments and the share price
I think that Premier Investments is one of the best ASX retail shares. Its shares are now firmly above where they were pre-COVID. Margins look stronger and the business is recovering, with a good outlook for Smiggle as the world settles on a ‘new normal’.
Premier Investments could continue to do well over the longer-term, so it could be worth putting on the watchlist for now. It’s hard to say how strong retail demand will be in the 2022 calendar year after a strong 2021, so I’m not jumping to buy it at this stage.
It’s also one of the good ASX dividend shares in my opinion.
