Shaver Shop shares soar on guidance lift
Following a weak start to the quarter during January and February, the retailer said sales rebounded strongly after customers snapping up products for resale in Asia helped lift comparable sales for the nine months to March 31 by 1.3 per cent.
The company now forecasts annual earnings before interest, tax, depreciation and amortisation of $13.7 million to $15 million, up from its previous guidance of $12 million to $13.5 million.
Shaver Shop said it is looking at the Asian market for further sales growth.
“The board and management are closely monitoring this opportunity and seeking to both nurture and support the sales growth, whilst being cautious as this channel is notoriously difficult to predict and forecast,” Shaver Shop said in a statement.
Australia’s infant formula market, particularly Bellamy’s, initially benefited from strong Chinese demand for its products, but then proposed regulatory changes hit the sector.
Shaver Shop also announced on Thursday that it has agreed to buy the Bondi Junction and McCarthur Square franchises, taking the total number of franchise buybacks to seven in the current financial year.
The stores “have been very strong performers for many years and adds two further quality sites to Shaver Shop’s corporate store network in NSW,” the company said.
The deals are expected to be completed by the end of May, but the earnings contribution isn’t expected to be material to its 2016/17 results.
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