Premier Investments’ first half guidance of 75-85% retail earnings (EBIT) growth was well ahead of Citi’s expectations and was driven by gross margin expansion and operating leverage.
The broker estimates gross margins expanded by 300 basis points year-on-year, reflecting industry-wide reductions in promotions as inventory levels were low.
Citi maintains a Neutral rating and lifts the target price to $25 from $20.60.
Target price is $25.00.Current Price is $25.35. Difference: ($0.35) – (brackets indicate current price is over target). If PMV meets the Citi target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).