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Briscoe's profit never got better

NZ NewswireNZ Newswire 3/11/2016 Paul McBeth
Briscoe improved its profitability during the year, with its gross profit margin increasing to 38.9 per cent. © Hannah Peters/Getty Images Briscoe improved its profitability during the year, with its gross profit margin increasing to 38.9 per cent.

Briscoe Group, which operates stores selling household items and sporting goods, lifted third-quarter sales 8.4 per cent after spending more on campaigns to woo customers, putting a squeeze on the retailer's margins.

The Auckland-based company generated $125.6 million of revenue in the 13 weeks ended Oct. 30 from $115.9m a year earlier, with sales at it homeware stores up 7.2 per cent to $79.1m and sales at its sporting goods stores rising 10 per cent to $42.1m, it said in a statement.

That was bolstered by the opening of three new stores in the period, and on a same-store basis homeware sales increased 4.6 per cent and sporting goods rose 6.9 per cent.

Briscoe managed to widen its gross margins in the first half of its financial year to 40.5 per cent from 38.9 per cent a year earlier with more rigorous inventory management combining with increased sales to drive up profit, though its need to compete more aggressively meant its third-quarter margins shrank in the latest period.

Still, the company expects annual profit to "substantially exceed" last year's record $47.1m.

"We expect gross margin per centage to remain under pressure for the balance of the financial year from the continuation of aggressive promotional activity and also the impact of hedged foreign exchange exposures taken across the last 12 months at less-favourable rates than those available currently," managing director Rod Duke said.

Briscoe's year-to-date sales were tracking at $393.9m, up 9.5 per cent from a year earlier, with homeware revenue increasing 7.5 per cent and sporting goods sales up 13 per cent.

The shares, of which Duke owns about 78 per cent, were unchanged at $3.65, up 31 per cent this year.

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