The Newswire

Your daily serving of financial goodness

Luxury Retailer Oroton cuts Earnings Forecast

Luxury Retailer Oroton cuts Earnings Forecast
May 22, 2015 By Simon Herrmann

Luxury fashion retailer Oroton Group (ASX:ORL) reported that it has cut its second-half FY2015 earnings in its Preliminary Earnings Update on Friday. The company reported that “despite uncertain consumer confidence and economic conditions, we expect modest earnings before interest and tax (EBIT) in the second-half of FY2015 compared to H2-14, as we gain traction with our strategy to elevate the Oroton brand, including growing margin, with reduced discounting, a return to like for sales growth and higher average selling prices.”

Oroton cited weakness in its GAP and Brooks Brothers operations and expects losses compared to the second-half of 2014. The company said it had taken steps to manage the cost base of the brands, including supply chain efficiencies. The report said the company’s expected group EBIT for FY2015 would be 66 per cent lower than the previous corresponding period, from $13.3m to $4.5m. Up to $3m of the drop in EBIT was attributed to the weaker Australian dollar, despite the company’s conservative hedging policy.

Chief Executive Officer and Managing Director Mark Newman also noted that the significant discounting program by Oroton led to smaller profits. “Third quarter and April in particular, reflects how much the heavy discounting from previous years has eroded the brands’ prestige,” he said in the report. “We have made significant headway in re-establishing Oroton as a true Australia luxury brand, with a new, elevated store concept, limited edition products, focusing on “clienteling”, an increase in average transaction value and endorsement as a luxury brand in the press.” Shares of the company have fallen 35c, or 13.67 per cent, at $2.21 per cent. ORL has fallen to its lowest point since 2009. It is down 42.45 per cent in the last 12 months and 41.48 per cent so far this year.

Share this article

Simon Herrmann Author: Simon Herrmann May 22, 2015

Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.

Growing Cases of Cancer Fuel Demand for Diagnostic Technology: Sienna Cancer IPO

The Australian government estimates that over 130,000 new cancer cases will be diagnosed in 2017 and the risk of individuals dying from cancer by their 85th birthday will be one in five.

Author: Simon Herrmann Jun 23, 2017


Sign Up for Free Trial
Recent Tweets
Recent News