Clothing group Pacific Brands expects challenging trading conditions to continue, with first half profit likely to be lower than the previous year.
Chief executive John Pollaers said trading at the start of the 2014 fiscal year had been below expectations and year-to-date sales were down compared to the previous corresponding period.
“Market conditions have been challenging with no near term signs of improvement,” Mr Pollaers told the company’s Annual General Meeting (AGM) in Melbourne.
“Fiscal 2014 will be a year of hard work as we continue to navigate through a difficult and, in many ways, unpredictable consumer and economic environment.”
Mr Pollaers said preliminary indications showed that earnings and net profit in the first half of full year 2014 “may be materially down” compared to the previous corresponding period.
A downturn in the workwear market had continued, particularly in the industrials sector.
But he said full year results would be heavily dependent on trading in the second half of fiscal 2014 which accounts for the majority of earnings in the half.
The company, which makes work clothes, bed linen and shoes, says wholesale replenishment orders and business to business sales were down, while direct-to-consumer sales were up.
Underwear and homewares sales were slightly higher, and workwear, footwear and outerwear sales were lower.
Mr Pollaers added that the company was continuing to selectively open more stores especially for the Bonds and Sheridan brands.
Over the past 12 months Pacific Brands has expanded its categories to include Bonds Kids and Collectibles, Berlei Sport and Berlei Dig Free.
Overall underwear sales during the 2013 full year grew five per cent, driven by the Bonds brand.
But Rio and Holeproof sales fell by nearly 27 per cent due to ongoing private label competition.
In August Pacific Brands posted a $73.8 million net profit, up from a $450.7 million loss in fiscal 2012.
Pacific Brands shares were 2.5 cents, or 3.4 per cent, lower at 72 cents at 1155 AEDT.