I am pleased you find something worthwhile to watch. We have SKY.50plus channels of rubbish.
Printable View
If you've got good broadband go Netflix HD $12.99 per month. No sport though.
You mean 57 channels Percy! This old Boss classic's as relevant as ever https://www.youtube.com/watch?v=Pu1AOImIFME
In the blessed name of Elvis let's spend our dosh on some less first world problems!
The Boss is my hero. A great social commentator
A man close to my heart. Doesn't lie when he describes bankers as "greedy thieves" and "robber barons"
“Jack of All Trades” is a great song, one of his. Listen to the powerful lyrics (and enjoy the musical side as well)
https://m.youtube.com/watch?v=OtGb5MPCMlg
Best verse -
" The banker man grows fatter, the working man grows thin /
It's all happened before and it'll happen again / It'll happen again, they'll bet your life / I'm a Jack of all trades and, darling, we'll be alright"
And metaphorically I agree - "If I had me a gun, I'd find the bastards and shoot 'em on sight" -something has to be done
Funny how your post confirms the world never looks good at 3am.!!!
HLG.Have a good history of "doing" good.They used to donate a lot of clothes to The Salvation Army.
The golf was exciting. It was good to see the Poms squirming at Lords. Greipel was the strongest again when it comes to bunch finishes in the Tour de France. A really good nights watching.
I made no reference to Hallensteins. Just adding to The Boss conversation who we both seem to appreciate.
Hope Hallensteins still donate to the Sallies (even though some of the Sallies shops might sell more than Hallensteins). Good on them
Golf,cricket,and cycling?????????????
I prefer my sweet dreams.....
Maybe a pointer to where they were was I watched "The Imatation Game" last night.
I will however confirm one of the stars of that film,Benedit Cumberbatch,never once appeared in my dream!!
The Sallies do struggle to get "good stuff" to sell,so any "quality" merchandise sold well.
Their shops objective is really to provide low income people with items they can afford,rather than trying to make a profit.
It is offcourse a pity to see rather nice Mercedes parked outside their stores.!
Ironic that old HLG's thread should prompt the most creative and philosophical musings :)
Enjoyed the Boss link thanks Winner. Don't know if we'll ever "care for each other as Jesus said that we might" as the song goes...the so-called religious right in the US seem oblivious to all his warnings about greed...
Spare a thought for Benedict Percy - who knows when he may find this sight. Keira will be deeply flattered though!!
That BNZ confidence survey I linked the other day had some telling comments from retailers how the falling $ is putting margins under pressure. Some also said they doubted consumers are up to accepting higher prices.
Wonder how HLG are getting on with putting their prices up?
Indeed, add http://www.nzherald.co.nz/business/n...ectid=11492942 to the list of B & M clothing retailers going mammaries up.
HLG is one of the better-managed retailers so I'm sure they will do miles better than the majority, but that's not saying margins won't suffer. I think consumers will HAVE to get used to the idea of paying more across the board. Because what other option do they have? Their dollars aren't going to get them much bargaining power overseas and then whack on all the duties on imports...
The increase in disposable income for many thanks to the lower mortgage rates and hopefully lower milk and oil prices should be a positive for HLG.
July electronic card spend was pretty healthy according toStats NZ yesterday
Boosted by apparel sales
HLG must be doing OK as the smart boys on the block
Its been a bloody cold winter too so that's bound to help well run apparel companies like HLG. I can't help wondering what excuse other apparel retailers will contrive this year to blame their poor winter sales :D
Any reason for this to be up 4.3% when there was a sea of red yesterday? Or simply fluctuating on small volume?
Small volume. I hold a modest amount as a good solid income stock. The noise that the Govt are making about lowering the threshold for imposing GST on overseas purchases will help a little bit and while much noise has been made surrounding the impact on their margins of the lower currency the fact is we're currently sitting at the 20 year Goldilocks 65 cent level so they've been there before many times and know how to make solid profits at that level.
Hit the nail on the head there Roger.
This stock isn't a stock you'd expect to nail a triple bagger on, but a reliable stock that provides an attractive and reliable cash yield for the punter.
Buy in at a good price, enjoy those brilliant divi's and any cap gain is just a bonus.
That's how I view this stock anyway. Short term price fluctuations cause no concern.
Interesting that this winter HLG management have not felt compelled to provide any updates on sales/forecast profits. In 2014 we got an update in June and an unaudited summary released on 18th August. This year the last info is from the interim in March when things were looking very promising and the cold winter since should have helped them do well this year. I'm expecting a profit in the range of $18.5-19m and will be disappointed if they don't deliver especially given we are being kept in the dark as to performance. What happened to continuos disclosure? If they are tracking +30-40% on last years profit surely an announcement is warranted and if not why not given the perfect conditions for HLG to thrive as indicated at back in March.
Maybe no news is good news but does seem rather strange change in behaviour
Maybe sales been good but margins are down a bit.
FY16 cold be very tough .....from sales growth and. Full year impact of lower NZD
New Zealand spending on electronic cards rose in August for the fourth consecutive month, as spending across all retail sectors increased.
http://www.sharechat.co.nz/article/b33adbe7/nz-spending-on-debit-credit-cards-rises-in-august-as-retail-sales-advance.html
Good news, people spending up before the effects of the exchange rate impact? Not sure, quite surprised especially with all the lobbying for increased consumer importing fees but perhaps the exchange rate is suppressing over seas spending at the moment.
Nice slow and steady gain recently, hopefully it continues its path into the 3.40's.
H&M coming to Auckland, not good news for HLG. I'm afraid these guys are PPL just a couple of year behind. If ZARA gets here too then she's goodnight nurse IMO
Boofters,
I'd have to disagree. PPL are toast, high debt, poor management, staff churn, overpriced offering - the list goes on.
HLG - a debt free retailer with a quality working/middle class offering with management that has a proven track record of adapting in a difficult retail environment. New competitors might make things tougher for Hallensteins but as far as lumping HLG with PPL that is a disgracefully inaccurate comparison imho.
Most likely only one flagship store in Auckland. Comparing PPL with HLG is like comparing chalk and cheese.
fair enough..but I did qualify this by saying 2 years ..HLG will struggle no question to remain as profitable as it is now. Agreed comparison with PPL is probably unfair - but I still stand by the Brand worth of HLG ( and therefore market cap ) will trend downwards over the next year or 2 or 3.
I'm with you largely Boofters. Matter of time before the internet catches up with HLG. But I've been thinking that for a while and they have continued to do well. Nevertheless, I have no retail stocks and also avoid LPT's that are heavily weighted to malls.
I tried to warn them before as well boofters, they prefer to look backwards at history rather than forwards at fashion trends.
H&M's entry was inevitable as is the entry of other global fast fashion chains, Uniqlo, Forever 21, Zara and Mango. One of any of these stores will do as much trade as 10 Glassons stores.
HLG has the resources and experience to change and adapt but it will cost them and if they don't succeed a better comparison will be Postie+.
While I see clothing internet sales growing, I don't think it will become the nextbigthing for quite some time at least (and HLG have every opportunity to maintain their position, also on the internet) Why? Buying some generic good like electronics on the net is fine, you know what you're getting. But with clothing, you order a medium and it is more like a small, so you have to return it. The large arrives but it sits funny and looks stupid so you decide to go for a different style altogether. That item then looks like a different colour to the photo, back it goes. My point being for stuff like clothing and shoes it's easier to just pop into the store and get what you need, unless you have a month and time to courier back and forward. Meaning HLG are quite safe IMHO and I hold in my diversified dividend portfolio. I like that clean balance sheet with no debt.
Why on earth anyone would want to buy some of the C*@p they sell, like the super tight chino pants that only go 3/4 way down your leg is beyond me*1, however I'm quite happy to profit from those who desire to dress like they're not quite right upstairs.
*1 sorry to anyone who wears Hallensteins supertight chinos*2
*2 Actually I'm not sorry at all. You look stupid, but thanks for your money.
My wife ordered a number of items from Ezi-buy one Friday morning.
The order arrived the next morning,ie Saturday morning.
All items fitted her perfectly,and all were what she wanted.
Buying clothes online has been a big thing for a long time. I remember 10 years ago there was a craze of people buying and selling second hand clothes on trademe!
It is one reason H&M et al. invests so heavily in their flagship stores. They help build brand presence and credibility for their online channel. No need to build a store in every town like HLG have done.
Long story short, I purchased some flash shoes online, 3 attempts to get the correct item in good order to me was only sorted by going to a store!
So I guess execution is the key. Hallensteins have been delivering results for years.
Percy I'm glad to hear you wife shops at Ezibuy and not HLG :p
Solid result with profit and sales inline with consensus forecast. Dividend slightly higher than consensus forecast. Outlook comments are concerning. Sales in the 8 weeks since balance date up 4% but at the expense of margin. Intense competition and comments regarding the lower $A and $Kiwi hurting margins and very limited ability to increase prices mean the outlook is clouded.
My read is profit will be lower in FY16. The $Kiwi and $A have fallen substantially and its clear that as the effect of this plays itself out in FY16 and beyond profitability in an intense retail environment will come under pressure.
This is a very well managed company with a very strong balance sheet, excellent stock management and well defined market niche but the currency headwind which is quite strong now and sluggish economy / retail environment means profit growth is extremely difficult and I can see analysts pulling back on forecasts for FY16 and beyond. Awesome dividend yield but I see the pay-out potentially coming under pressure. Note current pay-out of 31 cps slightly exceeds EPS. I think there's some risk to the downside at present for the SP.
http://www.sharechat.co.nz/article/7...ueeze-seenhtml
Been buying socks recently , very nice ones too.3 pairs for $10 to go with my $10 Tshirts.Staff keep rearranging the store layout and i see suits for $199 including dress shirt and tie.Often I'm the only one loitering in the shop.Margins look slim alright.
Its a little surprising that the market hasn't reacted to what is clearly a challenging outlook statement by the company. Analysts still crunching their numbers and investors waiting to be spoon fed what appears to be quite obvious or am I missing something ?
I think concerns about this is what drove the SP back down from when it approached $4, so I'd say it was already priced in to some extent.
I agree with hunter. No suprises for me on forward outlook.
Do you still hold Roger?
I have a model of the last 10 years earnings/margins/cots etc and my FY2016 "guestimate" if the NZD stays around US60-65c, and factoring that costs have been rising from the low 40s to high 40's as a percentage of gross sales the past 6-7 years, is that they should make NPAT of around $15m. If they do that then at $3.45 they are on a PE of 13-14. Hard to see too much upside at the moment but with a 100% pay out ratio and a solid long term track record worth holding IMO - would still yield 10% gross in that scenario next 12 months, and have yielded 12% gross over FY15 so the dividends keep de-risking your investment.
The key out take from the outlook part of the ill year announcement was The impact of a weaker New Zealand and Australian dollar is beginning to exert margin pressure and the ability to raise prices to compensate is limited.
This along with the 'intense competition' doesn't bode well.
An earlier post (#267) of mine showed the strong correlation between NZD and Gross Margin %. If the NZD/USD stays at 65/70 then margins could be impacted by $10m plus.
Arbroath - I reckon HLG earnings could possibly be as low as $10m this year, if things don't change.
As Percy says do your research and have faith in it and act accordingly. As such I staying out until things a bit clearer. Might even get some at $2.50 odd eh
See post #345 mate. With the huge move in the currency in recent months there's no point swimming against the tide...better off swimming with the tide, (investing in stocks that benefit from the lower $Kiwi) in a stock like SKL so that's what I'm doing. I might look to re-enter after a correction. I think all the risk to the SP is too the downside at present.
I agree with what my friend Winner69 has said above although I doubt it will head as low as $2.50 but you never know and the company has made in plain for all to see that the headwinds they're facing are quite strong so only time will tell.
Maybe not $2.50 but how about $2.75 then
NZD/USD averaged .76 in last HLG fiscal year .... if it stays at current levels implies ~15% increase in COS. Limited ability to pass on these increases they say. I think you made a good decision Roger
Heck over 370 - pretty amazing really but heck what do I know anyway
Margins must be fine then .... NZD has strengthened a bit anyway
Sales in NZ probably pretty good - economy purring along nicely
I am gambling that price will build back close to $4 again prior to Dividend date of 25th Nov.
Hope so anyways, brought some at $3.30, will be selling if gets to $4
Only light volume sadly...
Anyone know if HLG hedged against a fall in the NZD? How much, how long for?
"The group is exposed to foreign exchange risk arising from currency exposure predominantly with the US dollar with the purchase of inventory from overseas suppliers.
The Board has established a Treasury Risk Policy to manage the foreign exchange risk. The policy is reviewed on a regular
basis, and management report monthly to the Board to confirm policy is adhered to. All committed foreign currency
requirements are fully hedged, and approximately 23% (2014: 29%) of anticipated foreign currency requirements are hedged on
a rolling twelve month basis.
The Group uses forward exchange contracts with major retail banks only to hedge its foreign exchange risk arising from future
purchases. "
$ amounts are disclosed in the audited F/S, page 16.
Thanks. An optimistic reading of that says they're 'covered' for a year - ie currently using an NZD/USD rate of .72 ish.
So the pain is deferred for a year, and the company and customers have a chance to get used to higher prices.
The NZD/USD rate is recovering. I was thinking about selling but might hold off till the next meeting. The SP move could be pointing to some good news.
profit warning
For a company renowned for its paucity of information this announcement is weird
Great sales are up 3% but margins are down but you can't read anything into that
And the announcement is flagged PRICE SENSITIVE
yes, bull..... , sounds like and probably is a profit warning ....but how bad?
Maybe they should have just shut up until they can be more 'concise'
This is the second time they have seriously warned on margins, exchange rate and intense competition...make of that what you will but it would appear many investors ignored the first warning so perhaps the company felt compelled to issue another one ? When you go swimming ask yourself do you want to swim with the tide or against it ?
It can't be anything other than yield hungry investors who look at HLG's track good record of divvy's and are hoping the company can work their way through the present challenges without materially affecting divvies.
I think they're playing a risky game of potential capital loss first and foremost and lower dividend yields secondly.
Disc: Don't hold and not looking for a cheaper entry. I think the currency stays lower for longer.
Hang in there the bidder at 326 - they will come down to you when they realise how bad that announcement potentially is
Even then after Xmas your 326 might not look like the cleverest buy
Classic value trap. PE appears cheap and divvy yield very strong. Recent buyers were either hard of hearing or thinking even if it comes back a bit they're still a winner but what if it comes back a LOT ?
Roger/Winner,
Have to agree that it is hard to understand why they went to $3.80's recently other than yield chasers who don't do much home work. And clearly FY16 is going to be below FY15 by a margin - the issue is how much. If they don't have a reasonable Xmas/NY then my FY16 guestimate of $15m NPAT (down 15%) will be too optimistic. I'd note that in the past when the currency and margins have been lower they have controlled costs well - the past few years costs have crept up so that for me will be the biggest determinant - can they get costs down to mitigate the obvious margin pressure from the lower currency.
If they don't then you're pick of $10m earnings winner could be close to the mark - nothing is static but I'd also note their worst year the past decade I think was $12.8m NPAT in similar currency conditions with less buoyant sales back about 08 GFC time.
Massive abyss..(.noun a deep, immeasurable space, gulf, or cavity; vast chasm. .) between buyers and sellers suggests great uncertainty created by the company's own price sensitive announcement. I think the fact that the company tagged the announcement as price sensitive is another clue to the extent of the effect they anticipate on current year profitability. Buyers now appear cautious but weren't the first time the company said it, its really quite bizarre ?
Bidders relented near close - close 340
Lucky sellers?
Tomorrow could be interesting
HLG might not be able to match last years profit but I would have thought that for an well established company like HLG and the sector they are in this could be expected.
On the positive side HLG had a cash and cash equivalent of 23.7mil this was more than the total liabilities of 22.8mil at the start of this financial year. Some unfavourable times are likely tougher on HLG competitors which are likely to have more leverage. It might even shake out some competition or reduces new competitors.
Yes a good solid well managed company with excellent stock management and a strong balance sheet but nonetheless facing strong headwinds which the company itself is reluctant to at this stage quantify but has warned twice and this time with a price sensitive tag. Profit warning x 2 = cause for genuine concern as far as I'm concerned. Not sure why astute investors didn't get out at $3.80 after the first warning, go figure ? With relentless growth in internet shopping and ever increasing mall rents this has all the hallmarks of a value trap to me. I'm with Winner69 on this one. Profit reduction could get ugly.
Roger re the last sentence, have you been on their website? It's very good, I dont see them getting left behind in that regard, ie they're holding their own with internet shopping. In fact perhaps this will help them keep costs down by moving towards an online distribution system. They may even be able to leverage this move online to negotiate lower mall rents.
Whew sold like a mth ago with mini profit..all malls are dying a slow death! the thing with HLG is they have addressed the issue and have good online system. Lot of people(younger ones) I know order online. Good Co..keeping an eye to come back.
The headwinds of FX rates have been priced in for some time IMO... the question is how by much (i.e. could the impacts be bigger than expected) & are holders willing to hold during these times.
Slightly off topic, but gv1, if all the malls are dying a slow death, why are both St Lukes and Sylvia Park in Auckland looking to expand substantially , plus the big new one out west Auckland, and big overseas shops are looking to go into these malls. They can't all be getting it wrong!
I will agree that outlets such as HLG will be competing with online sales, however if they can get a good website going they maybe able to survive for awhile yet
I also sold awhile ago thinking that margins are getting squeezed and the dividend may not be able to continued at current rates
Access to more selection / cheaper prices. Search anything on online spending, plenty to back up the massive increase via this medium. While a threat, HLG's online platforms & social media mediums are on par. A good way that isn't capital intensive to reach new markets as well.
For what's it worth here are my forecasts for F16 with GM at 55% and GM at 53%
I think all are underestimating the margin impact.
These would give eps of 22 cents or 14 cents - what was last years dividend?
I feel the 13.3 case is still conservative. Sales growth for FY higher than achieved so far and have only included a modest increase in expenses which implies less marketing.
Yes forest et al - great company and decades of financials prove that. But this is not going to be one of their better years
So with market sentiment in mind great company but not a great investment at this particular point in time
Haha I'm early twenties... target market is below my age too.
Visited HLG's store in Welly not too long a go, was very impressed with the vibe & atmosphere they have created in there.
http://www.odt.co.nz/news/business/3...ting-unchanged
Forsyth Barr rate it as underperform
Bought 2x chinos for $100 yesterday at hallensteins. Just Jeans (next door) had 2x chinos for $110, they were different brands but the hallensteins ones fit better.
Also Glassons was crazy busy, 6 people qued at checkout.
Was in Wellington super store Friday bought work trousers, very busy there too.
A busy period for HLG, any predictions of the AGM on the 9th? Considering going
Winner,
I broadly agree with your numbers but guess gross margin at 56.5% down 2.8% from this year. Sales $227m, GM 56.5%, expenses flat at $108m, NPAT $15m.
Apart from the GM they achieve over the next few weeks the other key issue is expenses management - expenses have risen from 44%-49% over the past 7-8 years.
In this environment they need very tight expense control and I've assumed they pull it back to 47.8% from this years 48.9%. The last time GM was pressured like it might be this year next 53% in 2009 expenses were 44%.
Bear in mind HLG are facing a 'competitive market' as well as 'margin pressure' from higher input costs.
This affects Gross Margin 2 ways
Are HLG reducing prices in this competitive market? Probably are to some extent so one hit to margins.
Higher input costs are going to be the biggest worry. Input costs up 10% or more is a decent chunk out of margins.
Put the two factors together I reckon my 55% is the best it will be for them his year.the 53% I also showed I think is the likely outcome.
Announcements post Xmas will be interesting.
After the recent shocker of an announcement hope the guys and gals from HLG have cheered up a bit and have a good time at the ASM today
Might elaborate a bit on what's happening
They seemed pretty happy and acknowledging how tough it is out there at the moment is a good sign. Emphasis seemed to be on international competition, fierce market conditions and fx impact on margins.
Obviously margins are being impacted. Initiatives like (extract)
• Working closer with our suppliers and negotiating better cost prices. Reduced demand in China has given us the ability to achieve meaningful results with this strategy.
• Reviewing the current supply base and souring from new suppliers where there is a pricing advantage.
• Negotiating freight options and reducing the ratio of air freight to sea freight
• Paying careful attention to our buying. The gap between first margin and achieved margin is probably the biggest single factor we have full control over. Careful attention to timing, quantity, and pricing will bring results.
• Constantly reviewing the product mix and where possible improving the ratio between higher margin and lower margin product.
They say this will only 'soften' ' the impacts. Yes tinkering around the edges as often said.
Arbroath, I still reckon F16 earnings will be closer to $10m than your $15m.
(Cynics note: good they listed all those initiatives above but one would hope that's what they do all the time (good and bad) and not just as a reactionary measure in the tough times)
Percy will love this bit from the CEO speech. He keeps on telling us this.
Rental costs remain the single biggest factor. Over the past 5 years our rent costs as a percentage of total sales have risen by 1 percentage point. That translates to over $2 million before tax. In other words our landlords are taking an increasing share of our profits.
Hope they are getting a 'fair and reasonable' deal from the landlord on the new superstore in Christchurch. Wouldn't want that landlord in particular to take a greater share of profits would we
Keep in mind their worst result in the past decade is $12.8m around GFC time. The great thing with HLG is no debt. Might struggle to achieve my $15m guesstimate but the sky needs to fall for them to get squeezed down to $10m IMHO.
re Expenses - companies always sharpen the pencil when GM is under pressure so I'd expect some result in that area.
That year Gross Margin was 52.8%. Sales were $198m compared to this years $125m/$230m (haven't grown much over the last 7 years have they - less than 2% pa)
But the main factor when making a comparison to that year is that expenses are now more than $20m higher (jeez expenses increased in $ terms about as much as sales have increased)
I sticking with my forecast that at most NPAT will be $13m but likely to be closer to $10m.
One thing though - dividend will be still be pretty high and not unusual for them to pay out heaps more than Free Cash Flow
Good increase today - everybody feeling happy
And Arbroath during F09 (the bad year for them) the HLG share price peaked at 382 and hit 194 at one point
That 382 is a bit spooky eh
The more I look at HLG the more convinced I am that NPAT will closer to $10m than $15m
As Percy quite often reminds us share price follows earnings I see a decent sort of trade coming up some time next year. Chart demonstrates why
An observation - one would have to say that earnings have been trending down over the last few years. This suggests to me that the things they talk about like competition, online choices for consumers and the coming of international competiton have already started to have an adverse impact. And then staying in the game requires new larger stores in (expensive?) localities which doesn't help the cost of doing business. Just a rave
Pretty good dividend though - at the present time about all that's going for it