With a few noticeable exceptions, this seasons profit round has been flat to poor. Not a surprise though considering the state of the economy and increased business costs being lumbered onto business by this socialist, business hating Labour Government.
One industry that has fared particularly badly is the retail sector.
The countries largest retailer, The Warehouse(WHS) is likely to book a flat net profit of around NZ$96 million, up from $95.3 million last year.
Hallenstein Glasson(HLG) and Pumpkin Patch(PPL) are soon to report their profit results while Briscoe Group(BGR)reported a just over 12 % drop in half-year net profit to $10.53 million Friday 7 September.
Hallenstein Glasson and The Warehouse release profit figures Friday 14 September, and Pumpkin Patch is releasing its results on Monday 17 September. Pumpkin Patch's profit will be affected mostly by the weaker US dollar and stronger Kiwi as profits from foreign shores come back to New Zealand where the company is based.
Smaller retailers like Postie Plus Group (PPG) and the fast food operator Restaurant Brands (RBD) are likely to be similarly affected. RBD is likely to post an improved profit but coming from a loss last reporting season that wont be hard to achieve.
Micheal Hill(MHI) the Jeweller has done well this last year, with increased sales and profit. They have benefited from expansion but they have also been one of the few retailers that have done well out of the lower $US dollar , making their core cost, gold, considerably cheaper.
The retail sector has had pressure in general from a multiple shot at the bottom line from increased operating costs. Labour's raising of the minimum wage, parental leave costs, increased holidays and a myriad of other central and local government compliance's have hit retailers and other business sectors with a whiplash effect and it is not about to end soon.
Kiwisaver compliance and the removal of youth rates will hit this sector again in the coming year/s.
Retailers have also been hit by petrol, power and interest rate rises, directly on their business operating side and again with consumers having less to spend on their goods and services because of the rises in these costs.
This slump isn't going to go away anytime soon but it is not terminal for the strong retailers.
A good opportunity exists now for those long term investors to buy stock in those companies that you have had your eyes on but were maybe too expensive to warrant a buy for now their stocks have been beaten down to a level that looks a lot more attractive.
Disclosure: I own PPL shares
c Share Investor 2007