The survey showed overall business confidence fell 26 points, down from 59 to 33.
Profit expectations for retailers took the biggest hit, down from 33 to nine, while activity compared with a year ago fell from 25 to five.
While the results that have been reported showed signs of recovery, the outlook for the next financial period will be harder to predict than many had anticipated.
Hallenstein Glasson Holdings
Australasian apparel retailer Hallenstein Glasson Holdings appeared to be the business of choice for analysts, with Salt Funds managing director Matt Goodson describing the brand as the “star performer”.
Hallenstein Glasson reported a strong first-half result, driven by the group’s Australian operation. Photo / Alex Burton
In the six months to February 1, 2026, Hallenstein Glasson reported total group sales of $275.2 million, up 14.6% from $240m in the prior corresponding period.
Sales lifted across all three of its segments, Glassons Australia, Glassons New Zealand and Hallensteins.
The group was able to lift its gross margin from 58.5% to 60.9%, driving profits up 32.1% to $32m.
“Hallensteins just keeps knocking the ball out of the park. The apparel sector is littered with casualties, but they just year after year continue to hit the mark,” Goodson said.
Forsyth Barr’s Paul Koraua said the result was largely in line with expectations and the group continues to offer investors an attractive risk-reward.
Koraua highlighted the group’s new Sydney warehouse that is due to be commissioned in the second half of the year, which will support further rollout of the Glassons and Hallensteins brands in Australia.
Briscoe Group reported record sales but slower performance as Rebel Sport held it back. Photo / Supplied
Briscoe Group
The only full-year result of the season, Briscoe Group reported record annual sales of $798.83m for the year, although profit declined with a lower overall dividend payout.
Briscoe Group recorded a net profit after tax of $59.22m for the year to January 25, 2026, compared with $60.63m the previous year – a drop of 2.3%.
The group’s homeware segment performed the strongest, rising 1.42% over the year, while sporting goods came in slower at 0.13%.
Gross margin percentage also declined over the period, dropping from 40.37% to 39.23%.
Goodson said Briscoe Group had done “a good job” in a highly competitive space.
“They’ve managed to hold the line despite sales going backwards slightly. In a retailer, normally that leads to a profit deleverage, but Rod Duke has done a great job taking cost out against a pretty difficult backdrop.”
Koraua said while it was the third consecutive annual net profit decline for the group, he expected the trend to reverse in the next financial year as sales and gross margins recover.
He also noted the minimal impact Swedish retailer Ikea has had on the business’ bottom line, although more will be known about its performance later in the year.
The Warehouse Group is continuing work to reset its cost base, but margin pressure is making the task more difficult. Photo / Alex Cairns
The Warehouse Group
The Warehouse Group, meanwhile, has flagged concerns about ships with its imported products potentially skipping New Zealand as the conflict in Iran exerts pressure on the domestic retailer.
The group has been the most vocal about the potential impacts of the situation in the Middle East, although outcomes are hard to predict given the tumultuous nature of the conflict.
The group’s half-year result made improvements in most areas, with total group sales up 0.3% to $1.612 billion.
The group’s earnings before interest and tax (ebit) rose strongly, up 37.7% to $26.9m, while net profit after tax was $15.7m, up 33.6%.
However, group gross profit margin contracted to support the cycling through of old inventory, dropping 20 basis points to 32.3%.
Margin is a key concern across all analysts reviewed by the Herald, with Craigs Investment Partners research analyst Kieran Carling describing the result as a “mixed bag”.
He said while The Warehouse had demonstrated “early signs of self-help”, top-line momentum slowed for its third consecutive quarter, and the pace of The Warehouse’s turnaround remains unclear.
When considering the uncertainty of elevated fuel and freight costs and the subsequent pressures on consumer demand, Carling said it was unclear what cost increases the business may incur.
Goodson was focused on the group’s gross margin in comparison to the group’s cost of doing business.
“Their gross margin in round numbers is about 33%, but the cost of doing business margin as a percentage of sales is in the highs of 32%.
“The challenge for The Warehouse is to try to get that gross margin up to 34% and their cost of doing business down 1% to 2%, and then there’s some enormous operating leverage there.”
Koraua echoed the sentiment, cautioning the time it will take the group to implement changes in service of their targets, especially when considering the uncertainty and flow-on impacts on fuel prices as they start to put pressure on the cost of living, consumer confidence and supply chains.
KMD Brands improved on its last result, but the company’s future lays in the hands of an undervalued capital raise. Photo / RNZ, Nate McKinnon
KMD Brands
KMD Brands’ result was somewhat overshadowed by its delayed release because of its now announced equity raise.
KMD reported total group sales of $505.4m for the half-year, up 7.3% from $470.9m in the prior corresponding period.
The group’s earnings before interest, tax, depreciation and amortisation (ebitda) also lifted, up 20% from $52.7m to $63.3m.
However, it reported a net loss of $13.1m, a 36.8% improvement on its previous first-half loss of $20.7m.
As for the capital raise, the group said it was seeking $65.3m in equity and debt refinancing.
The capital raise will include a fully underwritten placement of new shares to institutional investors and a fully underwritten rights offer to retail shareholders.
However, the offer price of 6c a share represented a 69.2% discount to KMD’s traded price before the announcement of 19.5c. KMD’s share price has subsequently fallen to 6c after resuming trading.
But the focus from analysts has been on the group’s wider financial position, notably its debt position.
Carling was critical of the group’s urgency over the past 12 months and its transparency around covenants and capital allocation framework.
“Given KMD has been loss-making for the past 36 months, has continued to see debt levels rise, and been operating under amended banking covenants, we have flagged the group’s balance sheet risk for some time,” Carling said.
Carling cut Craig’s 12-month target price for KMD Brands by 70% to 9c as a result.
Goodson said retailers were like icebergs in terms of their capital structure.
“What you see above the water is the debt and any interest payments on it. Below the water, you’ve got 90% of the iceberg, and that’s the lease liabilities. You’re on the hook to pay rent for however long your lease is.”
He said the combination of lower gross margins and lower sales placed the company in a position where it could barely cover its liabilities, including rent.
“If they can sort out their retailing, and there are some mixed signs they are, then there could be tremendous upside. If they can’t, then the longer-term outlook isn’t so good.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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