Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Myer expected to unveil weak FY sales

Petrina Berry  |  13 Sep 2017Text size  Decrease  Increase  |  

Page 1 of 1

BRISBANE - [AAP] Myer's (ASX: MYR) struggle to overcome sluggish consumer spending will be back under the spotlight on Thursday, with the department store giant expected to confirm a fall in sales amid its full-year results.

Fierce rival David Jones last month called out falling consumer confidence as a major factor behind a 0.7 per cent fall in full-year comparable sales, and Myer looks set to suffer too.

Chief executive Richard Umbers has been trying to turnaround the business for two years but Myer already warned in May that "challenging trading conditions" would continue to hurt sales.

The retailer reported a 3.3 per cent fall in its third quarter sales in May with comparable sales down 2 per cent.

Citi analyst Bryan Raymond wrote in a note that the second half was tough for David Jones and that Myer would likely have had a weaker performance.

"David Jones and Myer's stores and customers overlap in many parts of Australia," Mr Raymond said last month.

Citi has forecast Myer's comparable store sales to drop 2.8 per cent and for earnings before tax and interest to have slipped in the second half of the 2017 financial year.

Mr Raymond said the second-half results will highlight the challenging conditions Myer has faced, particularly as Mr Umbers tries to cut back on discounting.

Myer announced in July that it will take a total $45.6 million hit after writing off the value of its 20 per cent stake in Topshop's Australian franchisee and impairing the value of its struggling sass & bide brand.

The retailer had previously expected net profit to exceed 2016's $60.5 million but the writedowns and another $20 million of costs are expected to weigh.

The company expects underlying net profit to be in the range of $66 million to $70 million.

Myer has shed many of its private labels and brought in more popular brands as concession stalls--outlets inside the department store--in the past year as part of its turnaround strategy.

The higher mix of concession stalls, with a focus on popular brands, including John Lewis and Veronica Maine, has reduced Myer's operational costs.

Myer shares have halved in value over the past year and were trading at 71.5 cents at 1325 AEST on Wednesday.

 

AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.