PACIFIC Brands has avoided the embarrassment of a ''second strike'' against its remuneration report and a full spill of the board, as it warned there had been no change to the poor trading environment that saw it crash to a $450 million loss last financial year.
New chief executive John Pollaers, who is only 50 days in the role at the embattled clothing manufacturer, told investors at the company's annual meeting yesterday that year-to-date underlying sales were down and that the trading environment remained challenging.
Pacific Brands sees no sales improvement
Pacific Brands Limited (ASX:PBG) says sales are down in the current financial year and warns it doesn't expect great improvement in the coming months.
Mr Pollaers said there had been no change to the company's outlook for 2012-13 since the release of its full-year results, when deteriorating conditions across its key markets triggered more than $500 million in write-offs and restructuring charges.
''There has been no noticeable improvement in the operating environment so far this year,'' Mr Pollaers said. ''Time will tell whether the latest interest rate cut has much impact, but prudently our plans assume more of the same. Trading remains volatile, with September down but October month-to-date in line with last year.''
Mr Pollaers said performance among retailers was mixed, and performance within Pacific Brands' portfolio was also a mix of up and down. ''We've got some brands in our portfolio performing and some that are a bit more of a challenge,'' he said.
The underwear division was up, with Bonds performing well but Rio and Holeproof offsetting much of that growth. Workwear was down after a drop in economic activity since March, and was showing no immediate signs of turning.
''As always, timing of the rollout of key contracts may impact the phasing of sales between the halves.''
Mr Pollaers said it was still too early to say if Pacific Brands would make more write-downs or further restructuring.
''My sense is the company is in much better shape as a consequence of the decisions that it's taken over the last five years,'' he said.
Investors have swallowed write-downs and charges of more than $1 billion since 2009, when Pacific Brands had a near-death experience after the global financial crisis.
Shareholders overwhelmingly supported the remuneration report after last year voting more than 50 per cent against the item and setting up a ''first strike'' for the company. Almost 98 per cent of proxies were voted in favour of adopting the remuneration report this year.