Premier Investments earnings to face pressure from soft demand - Morningstar

Pmv Pharmaceuticals

31/07/2023 20:37

** Analysts at Morningstar expect softening Australian
demand and intense competition to impact near-term earnings of
speciality retailer Premier Investments  PMV.AX  
    ** Says apparel retailers have increased discounting to move
seasonal stock with demand waning, which is hurting their gross
margins
    ** "In line with our short-term expectations for broader
Australian fashion & department store retailing subsectors,
consumers have been curtailing nondiscretionary spending
significantly," says Morningstar 
    ** Continues to expect PMV's apparel sales in Australia and
New Zealand - accounting for about 80% of group sales - to drop
by 13% in H2 FY23
    ** Brokerage's FY23 earnings estimate for PMV is 13% below
median FactSet consensus
    ** Over FY24 and FY25, brokerage's earnings estimates for
PMV are on average 5% below consensus
    ** Forecasts PMV's underlying operating margins excluding
profits from associates to decline to 20% in FY23, from 22% in
FY22
    ** Estimates margins to further tighten to 17% in FY24, but
expects these levels to be maintainable in the longer term
    ** PMV stock down 9.4% YTD, as of last close 

    

 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))