Myer Holdings announced a net profit after tax (NPAT) down 8.1 per cent to $81 million in their half year financial report released today, despite an increase in total sales.
In the 26 weeks ended 25 January 2014, total sales were up 0.3 per cent to $1,737 million and sales on a like-for-like basis were up 1.2 per cent compared to the corresponding period in the previous year. In comparison, David Jones’ announced yesterday its total sales increased by 3.8 per cent to $1,042.3 million.
The retailer’s earnings before interest and tax (EBIT) were down 10.5 per cent to $127 million and the cost of doing business (CODB) increased by 2.1 per cent to $540 million. Increased costs related to labour and occupancy, store closures and refurbishment costs, and operating expenses associated with growing the online business impacted the company’s results.
Operating gross profit was down 3 per cent to $712 million and the operating gross profit margin was down 21 basis points to 41 per cent.
Myer CEO Bernie Brookes said the business has delivered comparable store sales growth in six of the last seven quarters and the results were positive considering the trading conditions.
“It was encouraging to achieve total sales growth despite significant sales disruption caused by three of the top 20 stores being under major refurbishment and the closure of our store at Dandenong (VIC). It was also pleasing that this growth was achieved on top of strong growth in the previous corresponding period,” Mr Brookes said.
“The second quarter was characterised by weak trading during November and the first half of December but with significant improvement immediately prior to Christmas and a very strong stocktake sale,” Mr Brookes said.
Myer remains cautious about the consumer outlook for the remainder of the financial year and said earnings momentum was expected to improve into FY2015.
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Myer welcomed David Jones’ decision to appoint of Port Jackson Partners Limited as a strategic adviser to assist in evaluating Myer’s merger proposal.
The merger with David Jones, proposed in October 2013 and made public in January 2014, represents “a unique opportunity to create significant value for both companies’ respective shareholders,” Myer said.
Myer Exclusive Brands sales were up $7 million to 20.2 per cent of sales. The top performance category was cosmetics and youth, fashion accessories, women’s apparel and footwear also performed well.
Online sales continued to grow despite a “disappointing” outage of the website during the start of the stocktake sale. Myer believes online sales are “on track” to reach ten per cent of their business in the next five years.
Myer will pay an interim dividend of 9 cents, fully franked, payable on 8 May 2014.