discount polo clothes Oroton loses its shine
Shares in Oroton have nosedived after the luxury fashion retailer scrapped its forecast for earnings growth.
The company had been expecting earnings in the second half of its fiscal year to be higher than in the same period a year earlier, but third quarter earnings fell by more than $2 million.
Oroton now expects its full year earnings will be down 66 per cent on the prior year, due to the weaker than expected second half performance and the impact of a falling Australian dollar.
Its shares slumped nearly 23 per cent during morning trade but it has since clawed back some losses.
At 1425 AEST, Oroton was down 14 per cent, or 36 cents,
Chief executive Mark Newman said halting the heavy clearance sales that the Oroton brand had become reliant on had cost more than expected.
“The third quarter, and April in particular, reflects how much the heavy discounting from previous years has eroded the brand’s prestige,” he said.
“The market has remained uncertain and the timing of Easter and Anzac Day this year compared to last year also impacted sales.”
Oroton also operates the Gap and Brooks Brothers brands in Australia, and sales and margins in both businesses have fallen below expectations,
contributing to higher losses than a year ago.