👉 Background: Premier Investments is the retail parent behind brands like Peter Alexander and Smiggle. It also previously owned brands like Dotti, Jacqui E, Portmans and JayJays - until these brands were bundled up and sold as Apparel Brands to Myer for nearly $900 million in stock.

👉 What happened: Now, Premier has announced a full-year profit jump of 31% to $338 million. However, excluding the sale of Apparel Brands, Premier’s profit from its continuing businesses actually fell 22.5%, down to $144 million. This includes Smiggle sales, which dropped 10.7%.

👉 What else: The winners were Peter Alexander and Premier’s stake in Breville, but that still wasn’t enough to boost their underlying earnings.

What's the key learning?

💡When analysing company results, it’s crucial to separate “one-off gains” from “recurring earnings.” One-off gains can come from selling assets, restructuring, or revaluing investments. They give profits a short term boost.

💡On the other hand, “underlying” or “continuing” earnings are adjusted to reflect the core operations of the ongoing business.

💡In Premier’s case, the sale to Myer gave them a big one-time sugar hit and that pushed statutory profit higher. But underneath, Smiggle seems to be losing its sparkle...and Peter Alexander can’t carry the whole sleepover!