Priceline reports ‘subdued’ trading

Priceline Pharmacy had a slow trading period over Christmas and this has had an impact on parent Australian Pharmaceutical Industries’ half-year guidance, now expected to be 9 per cent lower than the previous corresponding period.

In a trading update on Monday morning, API said it expected net profit after tax (NPAT) for the half-year ended 28 February to be around $26.5 million, and full-year 18 NPAT only marginally above the $54.2 million it booked for FY17.

It comes amid what API called “suppressed retail trading conditions” within the Priceline Pharmacy network in the first months of fiscal 18 trading, including over the key Christmas period.

Year-to-date network sales, including dispensary, are up two per cent, while like-for-like retail sales within the network have declined 2.4 per cent in the first-half.

“In contrast to the strong sales we experienced during 2016, consumer spending remained subdued throughout the 2017 calendar year and we did not see that change during the Christmas period,” API CEO and managing director Richard Vincent said.

“We expect to see benefits flow from the steps we have taken to address the tougher retail environment. Foremost among these are investments to enhance our total customer experience, both in-store and via our digital transformation program that is designed to enrich our Sister Club loyalty program and our online capability into the future,” Vincent said.

“We have adjusted the business cost base while we’ve strengthened and streamlined our retail leadership team to drive a more responsive business in the changing consumer environment.”