BRISBANE - [AAP] Shares in Smiggle and Peter Alexander owner Premier Investments (ASX: PMV) have fallen to a three-month low, three days after the company reported a modest increase in annual profit.

Smiggle and Peter Alexander continue to drive revenue growth for Premier, which is controlled by retail veteran Solomon Lew.

But Morgan Stanley analysts have warned that Premier's apparel brands Jacqui E, Portmans, Just Jeans, JayJays and Dotti are dragging on earnings.

While those brands make up a reducing portion of sales--60 per cent of sales in 2016/17--the analysts said the risks facing the businesses "hold us back from turning more positive" on Premier.

"The structural challenges are intensifying as international retailers expand into regional Australia and as Amazon sets up direct retailing in the country--apparel is a category that is susceptible to online competition," the analyst team led by John Stavliotis said in a note.

They do not expect a sharp rebound across those brands because of the challenging consumer environment but rather a stabilisation with risks remaining in the medium term.

Premier's shares fell almost 7 per cent in the two days after the company released its financial results, and were down a further 3 per cent at $12.45 by 1320 AEST on Wednesday.

CommSec market analyst Steven Daghlian said Mr Lew, Premier's chairman, had also painted a negative picture for the broader retail sector where he called out high household debt and weak wages growth.

"They released some sluggish figures and have talked down the apparel business in Australia," he said.

He said it was also important to note that Premier's share price has enjoyed strong growth between 2012 and 2016, where it grew by almost double digits each year.

On Monday, Mr Lew slammed department store Myer (ASX: MYR) as having lost its way and for holding old stock that "belongs in the Salvation Army."

Premier Investments, through its 10.77 per cent stake in Myer, has lost $33 million from its investment in the department store during 2016/17.

The stake was worth $101 million when Premier bought it in late March but after Myer's share price slumped on a weak 2016/17 year, Premier's stake was worth $67.7 million by July 29.

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.