Online sales have firmly moved into double digit percentage figures, which few other major listed retailers in New Zealand have managed to replicate.
Last year, Pumpkin Patch posted a $27.5 million loss, which included restructuring costs of $37.6 million, but this year recorded an after tax profit of $5.1 million, for the year to July.
Craigs Investment Partners broker Peter McIntyre said following the ''major surgery'' during restructuring, Pumpkin Patch's online sales were underpinning its resurgence and this year's ''strong'' financial result.
''Trading conditions in New Zealand and Australia were tough, but in the other 20 countries sales were strong, up about 20%,'' he said.
He said online sales were up 18% on a year ago, at $38 million, which was more than double the earnings before interest (Ebit) from all its New Zealand stores combined. The company also made a $3.4 million gain in foreign exchange.
''Online activity really is forging ahead for Pumpkin Patch. It's one of their key markets,'' he said.
Forsyth Barr broker Suzanne Kinnaird said the result was in line with expectations and at the higher end of recent guidance, between $7.5 million and $9 million. The result is down due to difficult trading conditions, particularly in Australia, and the group's Ebit was below expectations, driven by higher than expected central support costs, due to one-off reorganisation costs of around $3.9 million.
''Growth in online sales was strong ... Pumpkin Patch is the most advanced on the New Zealand listed retailers in the online space,'' Ms Kinnaird said.
Crucially for Pumpkin Patch, it had reduced net debt, down 11.6% from $54.6 million to $48.3 million while stock held was down 4%, from $61.4 million to $58.9 million.
While there would be no final dividend, as Pumpkin Patch concentrated on paying off debt, its shares were up 6% to $1.06, albeit on light volumes.
Pumpkin Patch chief executive Di Humphries said while the ''significantly'' better result left the company in a stronger financial position, ''there's still a lot of hard work ahead of us, especially while trading conditions remain challenging''.
The volatile and tough trading conditions for retailers has been reiterated again this week.
While Kathmandu reported a record profit, which sent its shares soaring to new highs, its profit margins were squeezed slightly during the year, highlighting the company's attention to detail and continued hunt to optimise individual shop placement.
Kathmandu's revenue was up 10.6% to $384 million, earnings before interest and tax were up 11.2% to $63.4 million and after tax profit leapt 27% to $44.2 million; overshadowing Hallenstein Glasson's result.
Hallenstein Glasson sales were up 2% to $220 million, but profit before tax slid from $29.3 million to $25.9 million and profit after tax fell 11% to $18.7 million, with declining margins and a warmer than usual winter taking its toll.
At a glance
New Zealand: Pumpkin Patch and Charlie & Me stores, 53.
International: 288 partner locations across 20 markets (Australia 129 stores).
Potential partner negotiations: Middle East, Europe, Asia, Central America and South America. Talks include franchise, wholesale, and online models.
- Source: Pumpkin Patch
