Briscoe’s first quarter hurt by accounting change
Retail chain Briscoe Group, which operates Briscoes Homewares, Rebel Sport and Living & Giving, has reported a $600,000 drop in net profit in Q1, as a result of a difficult trading environment and the implementation of a new accounting standard.
The new standard, known as NZ IFRS 16, is also likely to impact full-year earnings moving forward, according to Briscoe Group managing director Rod Duke.
“For the group to continue to achieve positive sales growth is pleasing, however as widely reported, the retail environment remains highly competitive which, together with the impact of NZ IFRS 16, will put pressure on our ability to grow profit in the short term,” Duke said.
The group reported an unaudited 2.62 per cent increase in sales in the first quarter of trading, ended 28 April 2019. Sales totalled $150.6 million, compared to the $146.8 million earned in the same period of 2018.
According to Duke, the period was significantly different than the previous year, due to the Easter and Anzac Day occurring far closer to one another, which compressed the group’s promotional activity.
“While we are relatively pleased with the sales performance for the first quarter, continued pressure on margins and increased wage cost pressures have resulted in a bottom-line profit marginally below that of the same period last year,” Duke said.
The group’s homewares segment, Briscoe Homewares, saw sales grow to $90.7 million – a 2.85 per cent increase – while sales in Briscoe’s sporting goods segments improved 2.28 per cent to $59.9 million.
On a same-store basis, group sales rose 2.07 per cent compared to the prior year, while homewares same-store sales grew 3.17 per cent, and sporting goods ended up just ahead of the same period last year – having improved 0.41 per cent.