The Premier Investments Ltd (ASX: PMV) share price is down 11% after giving a difficult trading update.
Premier Investments currently has two core retail businesses. Peter Alexander is a pyjamas retailer, while Smiggle sells branded children’s school accessories.
FY26 update
The company has downgraded its guidance for what profit it expects to report for FY26, being the 52 weeks to 25 July 2026.
Premier Investments announced that FY26 Premier retail sales decreased by 2% year on year to $795.5 million.
The difficult trading conditions led to the business downgrading its underlying profit expectations. Underlying EBIT (EBIT explained) for FY26 is now expected to be $176 million, down from the previously expected $183 million (which was announced in March 2026).
Premier Investments said it has continued to make strong progress against the strategic initiatives outlined in its FY26 first half result.
Management said that Peter Alexander’s Peter’s Dreamers loyalty program has continued to exceed expectations, driving “strong customer engagement and insights”. The ASX share also noted Smiggle’s strategic reset to restore brand growth is “well on track”. The Smiggle Club loyalty program was launched in late July 2026, enabling the business to showcase its “upcoming new product direction to its core customer base”.
Peter Alexander UK store closures
After a challenging performance in the UK, combined with an ongoing negative outlook for that market, Premier has decided to exit Peter Alexander’s three existing stores in London. It will continue to serve UK customers with an online presence.
It’s also actively exploring international wholesale opportunities with global best-in-class wholesale partners.
Focusing on ANZ
The company said it will focus its growth capital on Peter Alexander ANZ and potentially capital-light wholesale.
It’s going to open at least five new ANZ stores in the first half of FY27, including the opening of a new flagship store in the Sydney CBD in October 2026.
The company said that it has identified further opportunities for new and/or larger format stores to better showcase its wider product offering.
Premier also noted that Peter Alexander will return to Myer Holdings Ltd (ASX: MYR) stores as a concession partner after an approach from Myer. Peter Alexander will relaunch in 24 Myer stores from August 2027.
Final thoughts on the Premier Investments share price
It’s a shame the UK store strategy didn’t work out, as that was an interesting growth initiative by the business. It’s good to see the company still intends to maintain a presence in the country with its online offering.
Peter Alexander ANZ seems to be the driving force for the overall business, so it now appears to be the key factor for longer-term success.
At this valuation, I think it could be an underrated ASX share, particularly with its large holding of Breville Group Ltd (ASX: BRG) shares.
