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Myer issues profit warning on subdued stocktake sale

Total sales in the first half of 2018 were down 3.6 percent to 1,719.6 million Australian dollars (1,337.9 million dollars), down 3 percent on a comparable store sales basis. Online sales in 1H 2018 were up 48.9 percent, following a 48.4 percent increase in 1H 2017. As a result of the further deterioration in trading, Myer anticipates 1H 2018 NPAT to be between 37 million Australian dollars (28.7 million dollars) and 41 million Australian dollars (31.8 million dollars) pre implementation costs and individually significant items. The company does not anticipate an improvement in retail trading conditions during the second half and said, given the recent sales volatility, Myer cannot provide a specific profit range for the full year 2018 NPAT at this time. .

Commenting on the first half trading, Myer Chief Executive Officer Richard Umbers said in a statement: “The significant deterioration in trading reflects ongoing challenging retail conditions with widespread industry discounting, a subdued performance of Myer’s stocktake sale and a continued shift in consumer behaviour characterised by reduced foot traffic and an increase in online shopping. I am in no doubt that our heightened focus areas including online and productivity are correct for this low growth environment as evidenced by the strong growth in online sales in the first half.”

On 14 December 2017, Myer Holdings Limited announced a second quarter trading update reporting a deterioration in trading during the start of the second quarter following a subdued performance during the first quarter. Total sales to the end of November, the company said, were down 2.3 percent and comparable store sales were down 1.8 percent, compared to the previous corresponding period. Total sales during the first two weeks in December deteriorated and were down 5 percent on the previous corresponding period. Total sales during January were down 6.5 percent on the previous corresponding period.

“I recognise that shareholders will be disappointed with today’s announcement. I am continuing my Chairman’s review of all aspects of the business including Myer one, omni-channel, merchandise, marketing, customer service, property and a thorough cost review. The focus on costs is ongoing and was evidenced by the announcement on 18 January in which we announced a number of redundancies and the exit of a further floor at the support office, which will deliver annualised cost savings of over 7 million Australian dollars,” added Myer Chairman Garry Hounsell

Picture:Facebook/Myer