Myer releases half-year earnings, books $52m profit

One of Australia’s premier retail brands has maintained an impressive half-year profit despite months of interest rate rises hitting household budgets and fresh warnings of slowing consumer spending.

Myer, the 124-year-old department store behemoth, recorded a net profit after tax of $52m for the half-year ending December 31, 2023, a 20 per cent decline on the $65m it booked in the prior corresponding period.

It booked $1.82bn in sales, a 3 per cent decline year-on-year.

Group comparable sales growth at the company, or sales from the company’s existing stores, also held steady from the record sales it recorded in the prior period, marking a 0.1 per cent increase.

Myer chief executive John King said the company’s “customer first plan” had delivered for the business “despite the macro economic conditions”.

“We were able to achieve a strong comparable sales outcome, cycling our best ever first-half sales on record in FY2023 and saw improvements in our market share across both stores and online,” he said on Wednesday.

“Our underlying profit result has remained robust despite the impacts from our Brisbane store closure and increased promotional cadence.”

The company announced it would return some $25m to investors, with an interim dividend of 3 cents a share.

Online sales growth rose 2 per cent to hit $390.1m or 21.3 per cent of total sales.

Despite the profit fall, investors cheered the results when the market opened on Thursday morning, noting they come in challenging conditions for retailers after 13 rate hikes hit consumers from May 2022 through to November 2023.

The company’s share price popped more than 5 per cent at the opening bell.

eToro market analyst Josh Gilbert said the results showed the company was “weathering the storm”.

“Their numbers certainly aren’t setting the world alight, but they offered some positivity on sales for the first six weeks of the second half of the year,” he said on Thursday morning.

“That’s good news, especially given the slowdown in retail sales we’re witnessing.

“All in all, it’s a pretty decent result.”

Mr King said comparable sales were up 4.9 per cent for the first six weeks of 2024.

“Like all retailers, we continue to remain cautious about the macro-economic environment; however, we are encouraged with our results for the first six weeks of 2H and have a strong program of deliverables to roll out during the first half as part of our ‘customer first plan’,” he said.

The company’s share price has boomed nearly 40 per cent year-to-date, including a sharp 14.3 per cent jump on February 6 after Myer released guidance on its expected results for the half-year and said it expected profits to land somewhere between $49m and $53m.

Myer also announced changes to its leadership structure on Thursday morning, appointing Olivia Wirth as executive chair.

Myer chairman Ari Mervis said Ms Wirth’s appointment would begin a “new era” for the storied company.

“Olivia is an experienced and respected leader with a track record of delivering improved business performance,” he said.

“She transformed Qantas Loyalty into one of Australia’s most successful customer engagement and omni-retail businesses.

“Since joining the board last year, Olivia has demonstrated impressive commercial acumen and an acute understanding of the dynamics facing both Myer and the broader retail sector.”

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