Godfreys' sales drop
Vacuum retail specialist Godfrey’s has reported a decline in sales in the first-half of fiscal 18.
Unaudited like-for-like sales were down by 6.2 per cent on the prior period for the half-year ended December 29, undoing an improving trend experiences in the September quarter.
The company attributed the slide to weaker than expected Christmas trading, but it is just the latest in lacklustre trading updates from the struggling retailer, which downgraded its earnings forecast for FY18 in December.
Unaudited underlying earnings before interest, tax, depreciation and amortisation for the first half was $3.6 million, 42 per cent down on the prior corresponding period.
Godfrey’s new CEO, Jason Gowie, who replaced veteran John Hardy late last year, is due to release a strategic update on the business in February.
Godfrey’s has been trying to turnaround the business by gradually converting its company-owned store network to franchise operations, which as of last August had helped to stabilise declining earnings.
But a reduction in conversions over the last six months, signalled at its full-year result last August, has contributed to a stalling of progress.
The specialist trader has struggled to remain relevant in recent years as discount department stores and appliances retailers have stepped-up competitive pressure on the business.
Hardy has previously signalled his concern that years of heavy discounting has left Godfrey’s without much wiggle room in its margins and with customers who have become accustomed to steep discounting.