Premier’s Profit Soars but Continuing Operations Face 22% Profit Drop: What’s Next?

A Transformative Year for Premier Investments

Premier Investments Limited has delivered a striking 31.13% increase in net profit for the 52 weeks ended 26 July 2025, reporting $338.2 million compared to $257.9 million in the prior year. This surge was largely propelled by the strategic disposal of its Apparel Brands business, Just Group Limited, to Myer Holdings Limited, and a consequential $1.03 billion fully franked In-Specie Distribution to Premier shareholders.

The transaction, completed in January 2025, involved Premier exchanging Just Group for 890.5 million new Myer shares, which were subsequently distributed pro-rata to Premier shareholders. This capital reduction and distribution dividend, valued at $6.46 per Premier share, marked a significant reshaping of Premier’s portfolio and shareholder value return strategy.

Continuing Operations, Challenges and Growth Initiatives

While the headline profit figure reflects a strong capital event, Premier’s continuing operations, which now focus on the Peter Alexander and Smiggle brands, alongside investments such as Breville Group Limited, experienced a 22.53% decline in profit after tax to $144 million. The retail segment’s earnings before interest and tax (EBIT), excluding significant items, fell 18% to $195.4 million, with a margin contraction from 29.6% to 24.1%.

Peter Alexander achieved record sales of $548 million, boosted by expansion into the United Kingdom with three new stores and a dedicated UK website launched in late 2024. This move represents a calculated investment in international growth, with tailored marketing and product strategies aimed at long-term success in a new market.

Conversely, Smiggle’s sales declined by 10.7% to $264.2 million, reflecting the impact of global cost-of-living pressures on its younger customer base. Despite this, the brand continues to innovate and expand its presence across more than 20 countries, supported by investments in technology and customer experience.

Investment Portfolio and Financial Position

Premier’s investment in Breville Group Limited remains a cornerstone of its portfolio, with a 25.36% stake valued at $372 million on the balance sheet and a fair market value exceeding $1.16 billion. Breville’s profit contribution increased by 14.2% to $34.4 million, underscoring the strength of this associate investment.

The Group’s balance sheet remains robust, supported by $333 million in cash holdings and property assets including its Australian Distribution Centre and Melbourne head office. Interest income declined slightly to $14.5 million, reflecting lower cash balances post-distribution.

Dividend and Shareholder Returns

Reflecting confidence in the Group’s ongoing performance, the Board declared a fully franked final dividend of 50 cents per share, down from 70 cents the previous year. This excludes the substantial In-Specie Distribution dividend of $5.65 per share paid earlier in the year. The dividend record date is set for 12 December 2025, with payment scheduled for 23 January 2026.

Premier’s total shareholder returns over the past three years have outpaced the ASX 200 Accumulation Index, delivering a 67.4% return versus the index’s 43.7%, a testament to its strategic capital management and operational focus.

Outlook and Strategic Focus

With the Just Group sale behind it, Premier Investments is now concentrated on nurturing its high-margin specialty retail brands and maximizing returns from its investment portfolio. The UK market entry for Peter Alexander is in its early stages, with key trading periods ahead that will test the brand’s international appeal. Meanwhile, Smiggle’s response to consumer pressures and innovation pipeline will be critical to reversing recent sales declines.

Premier’s management and Board acknowledge the ongoing transformation and emphasize talent retention and strategic investment as key to sustaining growth and shareholder value in the years ahead.