Citi Issues Cautious Outlook on Premier Investments Due to Smiggle's Recent Performance

Mon 24 Mar 25, 01:27 AM | Team Kalkine

Citi has issued a cautious outlook on Premier Investments (ASX:PMV) following its first-half performance, particularly from its retail brand Smiggle, which recorded a "far worse than expected" decline in sales. The brokerage firm slashed its price target for the Australian retailer to AU$24 from AU$26, though it maintained a "neutral" rating.

Premier Investments reported a net income of AU$117.05 million for the first half of FY25, marking a significant 34% year-on-year decline. The downturn was largely driven by Smiggle's underperformance, with sales plunging 14.5% compared to the previous year.

While Smiggle’s struggles weighed on the company's overall earnings, Citi noted that Premier’s other key retail brand, Peter Alexander (PA), continued to deliver significant results. PA’s sales were well ahead of expectations and showed sustained momentum heading into the second half of FY25. However, the brokerage expressed concerns over the unexpected magnitude of startup losses in the UK for the PA brand and has now factored in deeper losses from the region.

Investor sentiment remains cautious, with Premier Investments’ stock down 10.3% so far this year as of the last market close.

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