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Myer reports sales fall, with worse to come

Sales at Myer fell 3.8 percent in the year to 30 July, with CEO Bernie Brooks warning that if trading conditions don’t improve sales will continue to be flat and profit could fall by 10 percent in FY2012.

Sales for the year totalled $3,158 million, down 3.8 percent and 5.5 percent on a like-for-like basis. Net Profit After Tax (NPAT) for the period totalled $162.7 million, which Brookes said was good result given “this challenging trading environment.”

Poor consumer sentiment in the face of rising cost of living pressures, imminent new taxes and uncertainty around interest rate impacted the retailer over the last 12 months, as did flooding in Queensland and Victoria.

“In this context, I am pleased with the resilience of Myer’s performance on a number of levels,” Brookes said, highlighting its Exclusive Brands strategy, improved sourcing, optimised promotional activity and improved CCTV to reduce shrinkage.

Despite the positive impact of these strategies, Brookes warned the retailer faces a number of factors likely to make 2012 difficult. Additional costs associated with in-store occupancy, depreciation and renegotiated penalty rates and loadings will impact performance, as will global and economic conditions and poor consumer confidence.

“Assuming trading conditions do not deteriorate further, we anticipate 2012 sales to be flat and NPAT to be up to 10 percent below FY2011 of $162.7 million.”

“Global and domestic trading conditions will dictate when consumer confidence returns to more normal levels. Myer is very well positioned to benefit from any improvements in discretionary retail conditions when they occur.”

In the coming year, Brookes said Myer will place emphasis on further developing its e-commerce, digital marketing and social media strategy, after seeing rapid growth in online sales.

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