I guess Noodles is not surprised by today's poor result,having posted the above on 4-7-2015.
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I expanded those numbers to a Gross Margin level in more detail in a subsequent post (#267)
My optimistic forecast or F16 was for a 55% Gross Margin - 4% points less than F15
H1 GM down the 4% points - but full impact of lower $ still to come. I would contend a lot of margin decline to date are these 'competitive pressures'
Will be interesting to see how this pans out over the rest of year
15-20% overpriced at current $3.20 levels surely. I don't mind the business in terms of yield and cash position but where is their growth going to come from really?
You've nailed it. Bottom line is this result must be viewed in the context of how the other retailers have done and Warehouse, Briscoes and Kathmandu all seem to have done a heck of a lot better at managing competition and the currency than HLG. No reason to sugar coat it, this is a very poor period of financial performance. I would expect significant price weakness going forward given that the full effect of the lower currency is still to be felt.
I find it quite interesting that significant price weakness was being exhibited in the stock yesterday, see post #427...insiders in the know trying to get out ?
Hmmm...market clearly disappointed with the trading update it seems.
Disc - non holder.
Disc - Non holder and not trying to talk it down but I wouldn't be so sure mate. This result guidance beg's the question of how come the other retailers managed things so well, even KMD for goodness sake and yet Mr consistency in the retail game appears to have somewhat dropped the ball. Are mall rent increases some of the problem, is competition in this sector really intensifying or is the inexorable trend toward online retail finally making its presence felt on HLG's bottom line, or perhaps more likely a combination of these and other factors including the exchange rate ? Whichever way you slice and dice this I think this update is quite a shocker.
-10% off already low SP over one bad half year?
Will be looking into buying more this weekend.
as much as I cant believe I'm about to say this, but KMD brand is far more valuable than HLG -that is the core issue here.
They need to Create or Buy a "Lexus" type clothing brand with that cash mountain to eck out some decent margin - 3 wise men ?? - something because the market HLG is in is swamped with like product IMHO.