People are spending less per basket and on lower value items, says CEO
Australian Pharmaceutical Industries (API) has announced revised profit guidance for the financial year ending 31 August 2017, due to a “further decline in consumer sentiment”.
It now expects a full year net profit after tax to be approximately 5% up on the 2016 financial year.
Previous guidance had been for a minimum of growth of 10%.
And at the end of the 2016 financial year, API saw an underlying net profit after tax of 18%.
However API says the company still maintained retail market share in the period, and despite “weaker than anticipated” retail trading, its pharmacy distribution business remains on track to meet expectations by year’s end.
CEO and managing director Richard Vincent said that while the company had forecast soft demand, sentiment had weakened again – leading to the revision in full-year profit expectations.
“While we continue to see good market share results, solid growth in transactions across our network at 4% up on FY16 and the roll-out of new stores has remained on track, overall like-for-like sales has weakened due to consumers spending less per basket and on lower value items,” said Mr Vincent.
He says other retailers have also been reporting similar experiences.
API has new product launches and a newly enhanced Sister Club loyalty program to help stimulate demand in the coming months, said Mr Vincent.