Solomon Lew’s Premier Investments misses analysts expectations

A surprise $100m share buyback wasn’t enough to stop a deep dive by Premier Investments shares, as Smiggle continues to struggle and a profit update badly missed analyst expectations.

Solomon Lew said the group was well prepared for this important trading period ahead. Picture: Luis Enrique Ascui

A surprise $100m share buyback wasn’t enough to save Solomon Lew’s Premier Investments from a 16.8 per cent slide in its share price as an earnings update badly missed analyst expectations, driven mostly by a weak performance from Smiggle which is still yet to find a permanent CEO.

The sharemarket rout, which stripped $480m from Premier’s market capitalisation (and of which around $192m was taken off Mr Lew’s personal wealth as the company’s largest shareholder), also came as the fashion, property and investment company failed to offer a full sales trading update at its annual general meeting as is the custom with ASX-listed companies during the AGM season.

Premier Investments, chaired and controlled by billionaire Mr Lew, did however announce on Friday the appointment of a new interim Smiggle chief operating officer to lead the stationery business. It sacked its former CEO, John Cheston, in September last year over alegations of improper workplace behaviour which were aired by Mr Lew recently. 

While Premier’s sleepwear brand, Peter Alexander, continues to trade strongly as shoppers grab the chain’s colourful and fun PJs designs, stablemate Smiggle is underperforming and now has likely sunk Premier’s profit hopes for fiscal 2026.

At the company’s AGM in Melbourne on Friday, Mr Lew said in his chairman’s address that Premier expects its Premier Retail arm – which houses Peter Alexander and Smiggle – in the first half of 2026 to report underlying earnings of about $120m.

He said that in a challenging global environment, the Black Friday trading week provided encouraging early signs ahead of the all-important Christmas, Boxing Day and back-to-school trading periods. Peter Alexander had delivered record sales across the Black Friday and Cyber Monday promotional period.

“That said, we do not underestimate the significance of the December/January trading period ahead which is a critical driver for the group’s first-half result. The group is well prepared for this important trading period ahead,” he said.

The market had expected earnings guidance of about $141m for the first half, and the $120m target was a large miss. No sales update was provided for the two-month period between the release of Premier’s full-year results and Friday’s AGM.

The disappointing profit update sent shares in Premier diving more than 16 per cent to a low of $15.01 and the stock closed down 15.9 per cent at $15.22 – which was a two-year low.

Premier shares are down 46 per cent in the past 12 months, although this includes the in-specie distribution of Myer shares to Premier shareholders as part of the company’s sale of its apparel brands division to Myer.

Analysts pointed to weakness in the Smiggle business for the downgraded profit expectations and sliding share price.

“We understand the guidance downgrade has been driven by Smiggle (in line with our cautious view) given poor trading conditions in the UK and weak brand performance in Australia,” Citi analyst Adrian Lemme said.

He said the fact that Premier had also announced the appointment of Georgia Chewing as interim chief operating officer of Smiggle was a positive as Ms Chewing has 12 years with Premier Retail. But the market was looking for a permanent appointment to lead the turnaround of the brand, he said. Premier is also still searching for a permanent group CEO, with chief financial officer John Bryce also its interim CEO.

Premier on Friday also announced a $100m share buyback, which couldn’t stop the share price dive, as the company soaks up some of the $333m cash on its balance sheet. Premier will return up to $100m of capital to shareholders via a 12-month on-market share buyback.

Mr Lew will be the biggest beneficiary of the buyback as he is Premier’s largest shareholder with a stake of just over 40 per cent.

At a press conference after the AGM Mr Lew was asked about the sliding Premier share price, and said “the market is the market” and the company wass enjoying a “pristine balance sheet”, high earnings and a very good track record.

Mr Lew declined to comment further on his earlier accusations against Mr Cheston. When asked why he was yet to join the Myer board, Mr Lew said that was a matter for Myer and its executive chair, Olivia Wirth.

Originally published as Solomon Lew’s Premier Investments misses analysts expectations