The Premier Investments Ltd (ASX: PMV) share price has fallen 18% since giving a disappointing trading update last week.
Premier Investments is a retail business that owns various brands including Smiggle, Peter Alexander, Jay Jays, Just Jeans, Dotti, Portmans and Jacqui E. It also owns stakes of Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).
Trading update
The company decided to give an update for the 26 weeks ending 25 January 2025 after the conclusion of the sale periods of Black Friday, Cyber Monday and Boxing Day.
Premier Investments disclosed that retail conditions have remained challenging in the first half of FY25, with customers still experiencing cost of living pressures across all of its global markets and having a strong focus on value.
The FY25 first half isn’t over yet, with back-to-school and January sales yet to finish.
Premier Investments reported how much revenue and underlying EBIT it’s expecting to report for the first half of FY25.
Total global sales are expected to be in a range of $855 million to $865 million, with Australian sales “broadly flat” compared to the first half of FY24.
Premier Retail’s underlying EBIT is expected to be in the range of $160 million to $165 million.
The retail company said it expects to end the FY25 first half with a clean inventory position, “largely in line or below that” of the FY24 first half.
The trading update excludes any results from Premier’s investment portfolio.
Apparel business performance
The company said its apparel brands business (Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E) is expected to report global sales in HY25 of between $405 million to $412 million and underlying EBIT of between $31 million to $35 million.
The HY25 underlying EBIT guidance is $16 million to $20 million less than HY24. Premier expects the percentage of the gross profit margin for the apparel brands business to be “broadly flat” compared to HY24.
Is the Premier Investments share price a buy?
The management team of this business are seen as some of the best operators in the sector. I think this decline could be a good time to pounce. I’m excited by the potential of Peter Alexander and Smiggle to grow internationally, as well as the exposure to Breville.
I like the idea of buying retailers after a weak trading update because there could be a recovery not too far down the road if Australian interest rates are cut sooner rather than later.
At the moment, I’d call Premier Investments shares a long-term buy as both an ASX dividend share and ASX growth share.
