A sombre outlook from Specialty Fashion Group (SFH) is weighing on the share price with the stock dipping in lunch time trade.
The stock dipped 1.7% to 87.5 cents after hopes for a post-election sales rebound were dashed when the company reported at its Annual General Meeting yesterday.
Management said stronger sales have not materialised since September and warned that unless there is a strong turnaround in the December quarter, the group’s first half result would fall below the same period last year.
Brokers have been quick to cut their forecast on the stock with Credit Suisse going the extra step and downgrading the stock to “underperform” from “neutral” and cutting their price target to 91 cents from 97 cents.
However, as we wrote this week in Small consumer stocks at Christmas crossroads, the pickup in consumer spending is only likely to come through as we close in on the festive season.
Given that valuations are not demanding, the news has not changed our opinion on Specialty Fashion’s prospects since we wrote about the stock on September 18.
The stock is part of the Uncapped 100.