Shares in Noni B have fallen heavily to 18 month lows after the women’s fashion chain announced a $5 million write-down in goodwill.
In midday trade, Noni B shares were down 6.7 per cent to 56 cents.
The company warned it would slide to a full year loss of between $3.5 million and $4 million after the review of goodwill on its balance sheet, in a statement to the Australian Securities Exchange.
Despite tough trading conditions, Noni B confirmed it was still on track to record an after tax profit – before goodwill impairment – of between $1 million and $1.5 million, against a profit of $2.7 million in the previous year.
After taking into account the anticipated $5 million sting, the retailer could book a loss as high as $4 million.
Noni B has had a rocky time in the last few years. In 2011 it became the first retailer to issue an earnings warning ahead of the 2010-11 results season, saying at the time its full-year profit could dive as much as 85 per cent.
The nation’s retail sector is facing awful conditions at the moment with operators across the sector hit by poor consumer confidence and shrinking profit margins.
Yesterday Andrew Reitzer, the outgoing chief executive of grocery, hardware and liquor wholesaler Metcash, said shoppers were refusing to purchase items unless they were on steep discount.
He said he hoped the mood would change after the federal election in September but there were no guarantees a new government would shake consumers out of their depressed state.
Last month Wesfarmers chief executive Richard Goyder shocked investors when he warned full-year earnings before interest and tax at national retailer Target would drop to between $140 million and $160 million against EBIT of $148 million in the first half.
Wesfarmers warned Target could see its second-half earnings sink to an $8 million loss or, at the upper end, a $12 million profit.
Other retailers such as Coles, Woolworths, Myer and David Jones have been mired in low to flat sales growth over the last few years with many businesses forced to engage in cut throat discounts and promotional activity to get customers to open their wallets.
The original release of this article first appeared on the website of Hangzhou Night Net.Categories : 杭州龙凤