SURGING petrol prices and higher interest rates aren't hurting spending by shoppers at Country Road, which has forecast a strong annual profit after sales jumped by about 22 per cent.
Chief executive Ian Moir also revealed today the upmarket clothing group has made a good start to the new financial year, with double digit sales growth despite tough trading in June.
The retailer had a bumper May, but June was slow due in part to less promotional activity that last year, he said.
"The new season has opened well, with double digit growth, and we are back again very happy," he told AAP.
"We don't think for a second that it is going to be a softer, tougher year than it was last year - and we are prepared for that - but July so far has been a pleasant surprise."
The fashion retailer revealed today total sales had increased 21.9 per cent $289.7 million in 2007/08.
As well, sales in the second half of last financial year rose by 11 per cent to $144.1 million.
Mr Moir said the full year sales result was particularly pleasing given a tough retailing environment.
"The improved value proposition that our brand represents has continued to be well received by our customers," he said.
Mr Moir said the hard work done at Country Road was now pay off after several years of rebranding and slashing prices.
"We have reduced our prices on average by between 30 and 40 per cent (over the last 2.5 to three years)," he said.
"We have seen our volume of items sold double and we have seen our sales go from just under $200 million to just under $300 million."
The company now anticipates net profit for the full year ended June 30 will be "materially higher" than in the 2006/07 year.
In 2006/07, Country Road's annual profit surged 426.8 per cent to $16.98 million, thanks mainly to a tax benefit of $7.8 million.
Country Road's 2007/08 retail sales rose 14.2 per cent to $215.3 million while concessional sales rose 141.2 per cent to $72.4 million.
Wholesale sales declined 89.4 per cent to $2 million.
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