Myer cuts profit guidance as sales slump

Published on Wed, 23/05/2012, 03:00:24

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By Aimee Chanthadavong

Low foot traffic and a drop in sales in April, which has carried on into May, have forced Myer to re-evaluate its net profit after tax for the 2012 financial year.

The department store giant now anticipates 2012 financial year NPAT to be no worse than 15 per cent below 2011 financial year of $162.7 million.

In its third quarter results, Myer reported third quarter total sales was down 0.9 per cent compared to last year to $651.1 million. On a like-for-like basis, sales were down 2.1 percent compared to last year.

Total sales excluding rationalised categories (whitegoods, movies and music, gaming, consoles, and GPS), were down 0.2 per cent, down 1.6 percent on a like-for-like basis.

At the same time, Myer’s total sale from its Mid Year Stocktake sale was down 5.8 per cent from last year.

Myer CEO Bernie Brookes said since the start of the April, the trading environment has deteriorated “quite significantly”.

“While most parts of the business continue to be on track, our sales have not reached the levels we have expected and while foot traffic and sales have been poor in April it has continued into May,” he said.

“We have not seen any positive impact from the interest rate cut or the improvement in employment rate rate bute we hope that the upcoming cessation of the flood levy will help. We’re also not surprised that macro economic effects like fallout in equity markets and the ongoing turmoil in Europe has likely also dampened consumer sentiment.”

Its best performing categories for the quarter were Women’s Youth (Miss Shop), Womenswear and Menswear. The best performing states of Western Australia, South Australia and Queensland were offset by the performance in both Victoria and New South Wales.

Brookes also echoed the company continues to concentrate on its strategic initiatives including expanding its merchandise brand offering including T.M. Lewin and Elwood (Menswear) and Lipsy (Women’s Youth). They have also recently purchased Womenswear brand Grab and menswear brand Trent Nathan, which will be introduced in-store from August.

“Our omni-channel offering has gained momentum. We have a large delivery of initiatives in the next six to seven months. We have seen our online sales grow about 200 per cent to 300 per cent each week compared to last year and we plan to increase our online range and to do that on a weekly basis. We’re very comfortable with what we have done so far with more initiatives to come from August to February.”


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