By Claire Reilly
Myer has issued a trading update on its performance over the last six months, showing a slight uptick in sales and profits for the chain of department stores, and outlining its expectations for the remaining six months of the 2013 financial year.
In a letter to shareholders released today, Myer chairman Paul McClintock noted that sales for the first half of FY2013 (to 26 January 2013) were $1.73 billion, up 1.7 per cent year-on-year. Gross operating profits were up 2.3 per cent to $714 million, while net profit after tax was $87.9 million, up 0.7 per cent on the first half of FY2012.
McClintock said that Myer had found success executing its “strategic plan” despite the difficult retail climate.
“Consumer confidence continues to be influenced by a myriad of external factors including cost of living pressures, as well as domestic and global political and economic uncertainty,” he said. “During the half, we also faced a number of increased operational costs associated with labour and occupancy.”
Strengths in the Myer business highlighted by McClintock included the retailer’s focus on exclusive brands, its “strengthened” merchandise offer and new store openings in Fountain Gate (Victoria) and Townsville (Queensland) that had be “well received” by consumers.
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The retailer also has a strong focus on online retail.
“Implementation of our omni-channel strategy continues to be a priority,” said McClintock. “A significant opportunity exists for us to build on Myer’s strong brand, depth of range and extensive store network to deliver a seamless retail experience however and whenever our customers choose to shop with us.”
Looking forward to the remainder of the financial year, McClintock said the company expected the retail climate to remain tough, particularly given the growth of overseas online retailers.
“In the second half of 2013, we remain cautious about the trading environment but committed to pursuing opportunities to improve the business,” said McClintock. “The [yearly] result is expected to be impacted by the refurbishment of three of our top 20 stores as well as continued cost headwinds particularly in relation to labour and occupancy.
“As a company we continue to be frustrated by the duty and GST loophole that provides overseas online retailers with an advantage over local retailers. The internet has changed traditional retail and it is critical that reforms keep pace to ensure Australian businesses remain competitive.”