Myer swings back into black with $38.4 million half-year profit but sales slide
Myer has reported a $38.4 million half-year net profit, swinging back into the black after significant write downs drove the department store to a $476 million loss in the crucial December half a year earlier.
The iconic retailer said on Wednesday that total sales in the six months to January 26 fell 2.8 per cent to $1.67 billion, and were down 2.3 per cent on a comparable basis.
That is a slowing of the sales decline seen a year earlier, when they fell 3.6 per cent in a total basis and 3 per cent on a comparable basis.
Myer said its profit margin ticked up by almost a full percentage point as it prioritised private label products as part of a strategy being implemented by its new chief executive John King, with sales of those products growing 3.7 per cent.
Meanwhile sales at concession stores - the mini stores inside Myer run by major brands - fell 5.7 per cent.
Myer has been in strife for several years, as customers abandoned it for specialty retailers or fast fashion giants like H&M, Zara and Uniqlo, or migrated online.
It fell to a full-year loss of $486 million last year, and managed a meagre profit the year before that, while its share price has collapsed from $1.14 to 41¢ over the past two years.
“This result demonstrates the positive customer response to a number of initiatives... particularly during the all-important Christmas and Myer sale periods," said Mr King, who started in the top job in June last year.
“There are a number of... pilots underway across multiple stores to determine the customer response to new brands, preferred store layouts, brand adjacencies and marketing, which will enable us to roll out these improvements to further stores."
Mr King said that Myer was now on the right path but "there remains a lot of work to be done".
On an underlying basis, which excludes the impairments in the prior year, restructuring costs, the cost of closing stores and tax, Myer's profit was up 3.1 per cent to $41.2 million from $40 million a year earlier.
More to come