0140 GMT - Profit margins of Australian retailers look increasingly exposed to Morgan Stanley. The appreciation in the Australian dollar against the greenback so far this year has been a tailwind. But it's unlikely to fully offset cost pressures building through the supply chain. Analyst Mac Ross says industry feedback suggests apparel and footwear sourcing costs are rising by 3%-5%, with freight adding pressure. "In a heavily promotional market with limited pricing power, this leaves downside risk to FY 2027 gross margin expectations of 30-70bps, unless the Australian dollar strengthens further or cost inflation moderates," MS says. This is a challenge for Super Retail, Accent Group, Myer Holdings and Premier Investments, it says. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

March 31, 2026 21:40 ET (01:40 GMT)

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