Clothing and stationery retailer Premier Investments is expected to have boosted sales, but the market may be more interested in what chairman Solomon Lew has to say about Myer when he delivers half year results.
Premier is Myer’s largest shareholder and has been making moves to oust the department store chain’s board, with Mr Lew highly critical of the company’s performance and its executives.
He has previously accused the department store of losing its way, and misleading investors about how poorly it was performing in 2017.
Citi analysts say Premier shareholders will be looking for confirmation of the company’s strategy for Myer when it presents its half year results on Friday.
Mr Lew has been particularly critical of Myer executive chairman Garry Hounsell, saying his incompetence has contributed to a significant decline to the company’s value.
Analyst at Citi say Premier’s initial $101 million investment in Myer has depreciated by $63 million in just a year.
Smiggle and Peter Alexander are expected to have continued to drive Premier’s revenue growth in the six months to January.
Citi has forecast first half sales of $634 million, an increase of 7.7 per cent from a year ago, while retail earnings are estimated to be nine per cent higher at $102 million.
Stationery and accessory chain Smiggle is expected to have continued to perform strongly, with 28 per cent sales growth, largely driven by new stores.
But Citi said Premier’s other brands, including Portmans, Just Jeans, Jay Jays and Dotti, will be weaker, and expects there may soon be store closures.
‘We expects core brand sales to decline by two per cent and earnings to fall by 16 per cent,’ Citi said in a note.
‘Management continues to look for opportunities to lower rents, which may be a focus at the results.’
Premier Investment shares were up 27 cents, or 1.9 per cent, at $14.37 in late trade.