Best & Less expects profit drop after weaker customer demand

Footwear retailer Accent Group and Millers operator Mosaic Brands also reported strong trading updates on Wednesday.

Accent shares leapt by 10.7 per cent after the company said sales for the first 27 weeks of the financial year were up by 39 per cent on last year.

Mosaic said group earnings were expected to be around $15.8 million for the first half of 2023, an increase of 198 per cent on last year. Its shares opened 5.3 per cent stronger to 30 cents.

Other retailers have reported over the past two weeks that conditions are slowing, however: Baby Bunting said its December trading period was weaker than expected, while electronics retailer Kogan said sales declined by 32.5 per cent for the first half of the year.

Analysts said the jump in inflation, which came in ahead of market expectations, has the capacity to further squeeze household budgets and increases the certainty of a Reserve Bank rate rise at its February meeting.

“[The] gain in consumer prices during the December quarter affirms the likelihood that the RBA will press ahead with a further interest rate increase at the February policy meeting,” Betashares chief economist David Bassanese said.

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