Premier Investments Limited (ASX:PMV) shares soared more than 14%, hitting a day’s high of AU$23.67 upon record sales figures. The news was announced in the company’s fiscal 2022 results, along with a special dividend and a planned share buyback plan. Moreover, Premier said that it has seen a strong start to fiscal 2023.
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Record sales lead to strong profits
Premier operates more than 1,100 stores across half a dozen countries. It announced record sales figures of AU$1.5 billion for fiscal 2022, leading to a profit of AU$285.2 million. The retailer finished the period with AU$471.3 million in cash and no operating debt. Premier’s assets include a stake in Breville Group Limited (ASX:BRG), with a balance sheet value of AU$312.2 million.
On top of the final dividend of $0.54 per share, Premier declared a special dividend on AU$0.25 per share. It plans to pay both dividends on January 25. Premier has been paying dividends for years, with the stock currently offering a dividend yield of 4.51%, well above the sector average of 2.2%.
The strong results also led Premier to launch a stock repurchase program in addition to the special dividend. The retailer plans to buy back its own shares worth up to AU$50 million over the next 12 months.
Premier share price prediction
Premier shares have retreated about 30% since the beginning of the year. According to TipRanks’ analyst rating consensus, Premier stock is a Moderate Buy. The stock has already leapt ahead of most analysts’ expectations, as the current average Premier share price prediction of AU$22.28 indicates about 6% downside potential.
Closing remarks
The latest monthly retail sales report showed that Australian consumer spending has remained resilient despite the darkening economic outlook. That bodes well for retailers like Premier, whose strong start to fiscal 2023 seems to confirm consumers’ appetite to spend. The company’s buyback program also has the potential to make the shares scarce and more valuable over time.
