Hallenstein Glasson Holdings has reported flat profit despite an improvement in sales in the fiscal first half, with management citing a challenging economic environment in New Zealand.

The company’s sales for the six months ended February 1 rose 7.6 per cent year-on-year to $240 million. 

Meanwhile, gross margin on sales was down to 58.5 per cent from 58.9 per cent in the year-ago period, which was attributed to the challenging New Zealand retail environment over the peak trade period. Net profit after tax edged up 0.3 per cent to $21.2 million.

At Glassons, sales soared 15.8 per cent in Australia but were flat in New Zealand. The Hallensteins brand reported flat overall sales for the half.

“During the six months to February 1, there was a continued focus on operating cost efficiency across the group given the difficult trading environment,” said group CEO Chris Kinraid.

“This was balanced with continued investment in our operational capabilities to support the growth of our Australian brands, which continue to deliver strong performance.”

For the first seven weeks of the second half, sales have increased 5.4 per cent, but margins remain under pressure due to the continued subdued environment in New Zealand.

Given the uncertainty in the current economic environment in New Zealand, Australia and globally, the company expects the challenges to persist for the remainder of the year. 

“We continue to look for margin, operational and cost efficiencies, while remaining flexible with our product offerings to ensure we are well positioned for changes in the market,” added Kinraid.