By Grant Shepherd
Myer has issued a report to the ASX outlining that it has revised its previous economic outlook for the year after strong customer response to promotional offers, improved store presentation and local marketing.
After a solid Q3 and what looks like an even stronger Q4, Myer has outlined that it now expects sales for the second half of the year to be down around one per cent compared to the same period last year. First half sales were down around 3.7 per cent.
These results contrast with the previous expectation of a five per cent decline in comparable sales. Myer is also expecting profits to show a ‘mid to high single digit’.
According to the report, Western Australia and Queensland were the best performing states earlier in the year, however, in recent months Victoria, New South Wales and South Australia have contributed very well to the national result.
“Cosmetics, womenswear and accessories continue to be the strongest performing categories, while menswear and electronics have improved and traded well in recent weeks,” said Bernie Brookes, Myer CEO.
“In the context of a challenging environment and volatile consumer confidence, we will continue to manage our business cautiously. However, given our solid third quarter sales performance and assuming we do not experience any material deterioration in trading conditions during the remainder of the fourth quarter, we anticipate that our full year sales will be down approximately 2.5 per cent.”
Brookes highlighted that the mid season sales and stimulus package are proving successful for the business.
“Sales during the Myer mid season sale in April were higher than last year, and customers are continuing to respond positively to significantly improved in-store presentation and planned promotional activity. We have also observed a greater impact from the second Federal Government stimulus package, particularly in many of our suburban and regional stores,” he said.
Overall Brookes was very happy with Myer’s performance throughout the year.
“Despite the challenging trading environment, the turnaround phase of the Myer business remains on track. We are 37 months into a 50-month turnaround and our focus has been to improve our customer service and the presentation of our stores, increase our return on sales, drive operational improvements and invest in our store portfolio,” he said.
“The building blocks for the growth phase are progressively coming into place.”
Myer’s full year results will be announced in late September.