Global childrenswear retailer Pumpkin Patch - which boosted store numbers by 17 outlets to 261 across the world - has booked a 44% decline in after-tax profits for the six months to the end of January.
Chief executive Maurice Prendergast said ''challenging trading conditions'' in the second half of the 2010 financial year carried into the 2011 year, especially in the key Australian and New Zealand markets.
''The lacklustre trading environment has resulted in lower sales results across those markets,'' Mr Prendergast said.
Craigs Investment Partners broker Peter McIntyre said while it was a ''poor result'', it was expected by the markets and Pumpkin Patch shares traded down only slightly.
He said the result reflected how niche-market retailers in general were being hard hit during recessionary times.
He was concerned at Pumpkin Patch's increased bank debt, up almost 600% from $9.5 million a year ago to $66 million, and its inventory levels, up almost $21 million to $92 million.
Total operating revenue was down 10%, $193.9 million to $173.8 million, while operating surplus before interest and tax was down 39% from $22.2 million to $13.5 million.
However, with 17 new stores and the launch of new brand ''Charlie & Me'' stores under way, and improved earnings from the US and UK, Mr Prendergast was upbeat Pumpkin Patch was well positioned to take advantage of new growth opportunities and benefit when market conditions improved.
