Myer sales still cooling

MYER has warned of further profit pain ahead, with a warm start to the winter season hitting sales but analysts say the retailer’s latest sales slide could have been worse.

The embattled department store chain’s third-quarter sales dipped 2.7 per cent to $635.3 million compared to the same period a year ago.

Despite the drop, and a warning from Myer executive chairman Garry Hounsell that “unseasonably” warm weather in the lead-up to winter has impacted sales and may hit fourth-quarter profits, Myer shares jumped five cents, or 13.3 per cent, to 42.5●.

Citi analysts described the third-quarter sales figures as a “respectable result” given the warmer April temperatures.

Myer’s key like-for-like sales, which strips out new stores and closures, fell 3.1 per cent in the 13 weeks to April 28, with Citi saying the result was better than the 3.6 per cent decline in the second quarter.

“Myer has produced a credible result in a very challenging environment,” Citi said in a revestments,

search note. “Like-for-like sales momentum has not meaningfully improved, but is not getting worse, despite a headwind from weather.” However, Citi has maintained its sell rating and a 41 cents target

price for Myer.

Myer also announced that it will stop providing quarterly sales updates after the end of 2018/19.

Myer’s largest shareholder, Solomon Lew’s Premier In- said the update showed Myer’s “extreme” discounting had failed to arrest its sales decline. A spokesperson for Premier said Myer shareholders should brace themselves for yet another profit downgrade during the fourth quarter.

Myer issued a first half profit warning in February before unveiling a $476.2 million halfyear loss in March due a hefty writedown in goodwill and a slide in sales.

Richard Umbers stepped down as chief executive not long after the profit downgrade and after trying for three years to turn Myer’s fortunes around. Myer’s newly appointed British chief executive John King will start on June 4 following the approval of his visa.

Mr Hounsell said Mr King has been visiting stores and talking to staff and customers recently and understands the “significant task at hand in turning around the business”.

Mr King is credited with having turned around British department store chain House of Fraser while he was the retailer’s chief executive in the eight years to 2015.