Myer has record leap in trading
Turnaround after frenzy spend
DEPARTMENT store owner Myer has enjoyed its strongest sales on record for the first five months of the new financial year, as buoyant trading conditions led by a frenzied Christmas shopping spree has set it up for as much as a 104 per cent leap in first-half profit.
In a trading update provided to the market on Tuesday, Myer confirmed investor sentiment that department stores and many retailers had enjoyed some of the best trading in recent years over the first half and in particular sales campaigns starting with Black Friday in November and extending into Christmas and Boxing Day.
Last week, rival department store David Jones also released its most recent trading performance, showing improving sales, with other retailers such as JB Hi-Fi, Super Retail Group and Michael Hill also enjoying robust sales and earnings as consumers spent up over the holidays.
It bodes well for many retailers in the upcoming reporting season and has underlined the willingness of consumers to spend in the leadup to Christmas.
Now it is Myer’s turn to dazzle investors, with the department store on Tuesday reporting that total sales for the five months to December 31 rose 24.8 per cent. It said that store sales were up 37.9 per cent, although online sales were weaker by 9.4 per cent as lockdowns ended and shoppers once again enjoyed visiting physical stores rather than only shopping online.
Myer said on Tuesday it expected its first-half net profit after tax to be between $61m and $66m, up between 89 per cent and 104 per cent over the first half of 2022, or between 54 per cent and 67 per cent higher than the firsthalf 2020 pre-Covid period, noting that the stocktake sale period was continuing and Myer’s interim reporting period concludes on January 28. Trading from the stocktake sale period has continued to strongly outperform the prior corresponding period, which was impacted by Omicron, the retailer said.
Shares in Myer have more than doubled in the past 12 months to 90c. Myer chief executive John King said the results, which reflected its best sales on record for the first five months, were particularly pleasing and more importantly also reflected improved profitability within the business.
“As with most retailers, we remain cautious on the macroeconomic environment for the remainder of the calendar year, but are equally confident in the continuing momentum we have within the Customer First Plan and a range of initiatives we are executing.”
Myer’s largest shareholder, billionaire retailer Solomon Lew, will be one of the major beneficiaries of the improving Myer earnings and share price.
Late last year, Mr Lew scored a victory in his fiveyear campaign to get his candidate on to the Myer board with the election of former Myer Grace Bros boss Terrence McCartney, who is also a director of Mr Lew’s Premier Investments fashion and investment company.Premier Investments has a 22.87 per cent stake in Myer.