Myer's profit falls as Australian retail tightens

Marco Green
September 14, 2017

In more bad news for Myer, its total sales fell over the 2017 financial year, by 1.4 per cent on FY16 to $3.2 billion.

Myer will shed more light on its struggle to turn around sluggish sales amid weak consumer spending when it unveils its full-year results on Thursday.

The retailer made just $11.94 million in statutory net profit for the 52 weeks to July 29, down 80.3 per cent on the previous 53-week year, blaming a $13.9 million cost hit and significant items of $42.1 million.

The company announced three stores - Colonnades in Adelaide, Belconnen and Hornsby - would close amid challenging retail conditions.

"We are obviously disappointed to have not reached our target of exceeding last year's NPAT. and that progress against our metrics that matter is slower than we anticipated", Mr Umbers said.

"We are building a more powerful and profitable omni-channel business and the performance of our online business was a standout", says Umbers.

The "New Myer" strategy is still in place, and in a note to shareholders this morning the company said it is a "leaner" and more efficient retailer than 12 months ago.

Under Umbers, Myer has surrendered or announced an intention to exit nearly 100,000 square metres of space, abandoning former chief Bernie Brookes's expansion strategy which backfired on Myer as Australians abandoned department stores to shop online or at the dozens of cheaper global brands setting up in Australia.

Myer said in May it would beat its 2016 result but later revised that down.

The result was at the lower end of the company's earlier guidance of A$66 million to A$70 million.

Myer is in its second year of a five-year $600 million turnaround plan which involves giving more space to popular brands while cutting back its own private labels.

Implementation costs associated with New Myer were $20 million pre-tax, relating mainly to space optimisation, asset impairments and redundancies. "The company strongly believes these investments will best position Myer to deliver continued sustainable profit in an unpredictable environment.", it said in a company statement.

Sales in the first six weeks of 2017-18 were "below expectations" and Myer said it expected "continuing changes to both consumer behaviour and the broader competitive environment" in the year ahead.

Other reports by Click Lancashire

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