Sales at Premier Investments' rock star stationery brand Smiggle have rocketed by 79 per cent in the last two years and 41.8 per cent last financial year alone, on the launch of 52 new stores, including 40 outlets in the United Kingdom.
Smiggle and pyjama powerhouse Peter Alexander put a rocket under Premier's full year sales, pushing them past the $1 billion market for the first time in fiscal 2016.
Peter Alexander's sales surged 20.4 per cent higher to $169.1 million on the back of 11 new store openings and there are plans to roll out between five and seven new stores for the next three calendar years.
Premier chairman and major shareholder Solomon Lew said the business had delivered a very strong performance in "a difficult retail environment".
"The 2016 result demonstrates the continued successful implementation of the Premer retail strategy to drive growth through Smiggle, Peter Alexander and our online offer, while rejuvenating our core brands," Mr Lew said.
Despite the big sales numbers, full year underlying net profit of $105.5 million fell short of consensus estimates by 2 per cent, according to broker Citi, pointing to the tough trading conditions in the second half, including the warm start to winter and the weaker Australian dollar.
Citi head of research Craig Woolford said he estimated like for like sales growth slowed to 0.1 per cent in the second half down from 6.9 per cent in the first half and gross margin expansion suggested "management prioritised profitability over sales productivity gains in fiscal 2016."
Premier's share price was under pressure, down more than 3 per cent after trading as low as $15.09.
Smiggle opened 40 new stores in the UK during the financial year and Premier's analysis of the post-Brexit market suggests the UK's vote to leave the European Union has not hurt sales.
Premier said the sales performance of the brand had been "equal to or better than prior to the vote" and it's targeting a 200 store network in the UK, supporting annual sales of more than $200 million by calendar 2019.
New Smiggle stores opened in Malaysia and Hong Kong in fiscal 2016 and the kids' stationery favourite will be trading out of 10 stores in those two markets by Christmas this year and 50 stores within five years.
Chief executive Mark McInnes said Smiggle boss John Cheston had transformed Smiggle into a unique, global brand.
"During the year we opened 52 new stores worldwide, more than 50 per cent of Smiggle's revenue for the financial year was delivered by international stores, underscoring our decision to invest in the brand globally," Mr McInnes said.
Total sales at Premier surged 10.9 per cent to $1.05 billion and the vital like for like sales growth was 3.5 per cent higher across Premier's brand stable, which includes Dotti, Portmans and Just Jeans.
In addition to growing sales, Premier has also increased its gross margin, a key measure of profitability, by 78 basis points to 63.9 per cent despite a weak Australian dollar and the "warmest start to Autumn on record."
The group's full year net profit increased by 17.9 per cent to $103.9 million and underlying net profit was 22.6 per cent stronger at $145.4 million.
Online sales of Premier's brands rallied by 39.6 per cent in the year and the business is confident it can drive sales through this channel past $100 million by 2020.
"Our strategy is unchanged and we continue to pursue it relentlessly, investing in expanding Smiggle globally, growing Peter Alexander significantly and delivering a superior online experience for our customers while achieving efficiencies and continuing to invest in our core apparel business," Mr McInnes said.
Premier's plans for its core apparel brands, including Jacqui E and Jay Jays, include opening 18 new stores, 33 store relocations and refurbishments as well as 28 refurbishments in existing locations this year.
Premier announced a fully franked final dividend ot 25¢ per share up from 21¢ in fiscal 2015 and brining to the total full year ordinary dividend to 48¢ a share.
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