SYDNEY – Eighteen months into a five year turnaround plan, Myer, Australia’s biggest department store chain, has returned to profit growth in the first half and said it expects to this year deliver its first full year profit since 2010 m.
In the 26 weeks to January 28 the Melbourne-based retailer, which operates 67 stores across Australia, reported a 5.3 percent rise in net profit after tax to 62.8 million Australian dollars, or $47.23 million at average exchange for the period
Revenue declined 0.6 percent to 1.78 billion Australian dollars, or $1.34 billion, but increased 0.3 percent on a same-store basis.
Second quarter sales dropped 1.3 percent to 1.06 billion Australian dollars, or $801.3 million, down 0.5 percent on a same-store basis. This compares to first quarter total sales growth of 0.6 percent and growth of 1.6 percent on a same-store basis.
Sales per square metre, on a 12 month rolling basis, increased by 3.4 percent over the period.
Online sales grew 48 percent.
Operating gross profit margin declined by 41 basis points to 38.3 percent.
Earnings before interest, tax, depreciation and amortization increased 2.7 percent to 142.2 million Australian dollars or $107 million.
Earnings before interest, tax, depreciation and amortization margin increased by 25 basis points to 8.0 percent.
“Myer delivered encouraging sales around the key trading periods of Spring Racing Carnival and Christmas offset by subdued sales during the Stocktake Sale, resulting in modest comparable store sales growth for the half,” said Myer chief executive officer Richard Umbers.
“The improved profit result was achieved against a backdrop of aggressive competition with heavy discounting both before and after Christmas and patchy consumer confidence.”
Over the period three stores were closed, while about 700 new or upgraded merchandise installations were introduced.
The Warringhah Mall store on Sydney’s Northern Beaches, which reopened in November after a 12-month, 310 million Australian dollar, or $228 million, upgrade, saw sales per square metre up 38 percent compared to fiscal 2014, when the store last traded without centre disruption.
Sales in concessions – which include 34 Topshop and Topman concessions, with Myer a 25 percent stakeholder in the brands’ Australian franchisee – grew 25 percent to 386.2 million Australian dollars, or $291 million.
Sales of ‘Myer Exclusive Brands’ or private labels, however, declined 12 percent to 300.2 million Australian dollars, or $226 million.