While the company expects to "substantially exceed" last year’s full year after-tax profit of $47.14 million, group managing director and majority shareholder Rod Duke noted first half gross margin gains fell away going into the third quarter trading.
Despite the competitive retail environment, Mr Duke said Briscoe’s gross profit margin percentage had finished in line with the rate achieved during the third quarter of last year.
"As we begin the crucial final quarter, we remain optimistic in our outlook.
"We are certainly encouraged by our performance to date and confident that the group’s full year tax-paid profit will substantially exceed last year’s tax-paid profit result of $47.14 million," he said in a statement.
Craigs Investment Partners broker Peter McIntyre said while competition and the cost of promotions was affecting margins, another contributing factor was foreign exchange hedging coming off contract for Briscoe.
Briscoe’s share price rose 1.1% after the announcement, trading at $3.69. For the past 12 months, its share price was up 28%, with Mr McIntyre saying that was underpinned by benefits from a strong domestic economy. Briscoe’s unaudited sales for the third quarter; the 13 weeks ended October 30, 2016, of $125.6 million, were up 8.38% on the $115.9 million booked for the same quarter last year.
For the quarter, homeware sales increased 7.24% to $79.1 million, while sporting goods increased 10.37% to $46.5 million.
"We expect gross margin percentage to remain under pressure for the balance of the financial year from the continuation of aggressive promotional activity and also the impact of hedged foreign exchange exposures taken across the last 12 months at less-favourable rates than those available currently," Mr Duke said.
