Billionaire Solomon Lew’s retailer Premier Investments has slumped as the top mid-cap decliner in afternoon trade, with shares down 13% to $15.81 after issuing earnings guidance below market expectations.
RBC Capital Markets analyst Michael Toner, along with peers at Citi, described Premier’s first-half guidance as “soft”, with the company flagging earnings of about $120 million – slightly under RBC’s $125 million forecast but around 18% below Visible Alpha consensus. The update came alongside management’s warning that “discretionary spending is under pressure with consumer cautious due to cost-of-living impacts”.
RBC noted that the announced $100 million buyback is not especially significant for earnings per share, estimating about 3.6% EPS accretion. However, it highlighted Premier’s solid balance sheet, with $333 million in cash and no debt, which it said provides ample headroom.