Premier Investments (PMV) – Mixed result

Premier Investments operates various specialty retail fashion chains in Australia, New Zealand, Asia, and Europe. It operates through two segments, retail, its best-known brands being Peter Alexander –specialising in sleepwear and leisure wear – and Smiggle – selling colourful stationery and accessories – and investments, including a 25% stake in appliance manufacturer Breville. Premier Investments was incorporated in 1987 and is based in Melbourne, Australia.

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Premier Investments’ second half FY25 (2H25) retail earnings before interest and tax (EBIT) came in approximately 3% below consensus, while the year-to-date FY26 trading update (+5% year-on-year sales growth) was ~2.5percentage points below expectations. Despite this, the result reinforced the strength of Peter Alexander and the optionality from mergers and acquisitions (M&A), underpinned by the company’s net cash position of approximately $264 million. Smiggle continues to underperform, with 2H25 revenue down 5% year-on-year. Investor sentiment is increasingly shifting toward structural concerns, though management maintains the issues are execution-related—understandable given the brand has lacked a CEO for circa 15 months. Peter Alexander delivered robust 2H25 sales growth of ~9%, ahead of consensus of ~7%.

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Growth was supported by new store openings and store upsizing. Premier has confirmed at least seven new or upsized stores for 1H26, with further opportunity for 15 or more sites. The UK expansion of Peter Alexander remains in early stages, with 2H25 EBIT losses of ~$5 million and annualised sales per store of ~$1.6 million, versus ~$4 million in Australasia. Early metrics are weak, but the UK remains a longer-term option, potentially contributing $29–77 million in EBIT by FY30 if successful. Premier trades at a ~30% price/earnings discount to the average ASX retailer’s multiple of circa 19x. At current levels, the market is attributing minimal value to the Smiggle business.

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Our price target increases to $23.40 per share (from $21.70), reflecting modest earnings per share downgrades offset by a mark-to-market uplift on the Breville investment.

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