Myer Holdings (ASX: MYR) a long-established name in the retail industry, is navigating the stormy seas of a challenging market with docility. As consumers tighten their belts and inflationary pressures mount, Myer’s latest trading update addresses both the hurdles faced and the Company’s keen measures to secure a stable future.
In June 2024, Myer made headlines by appointing Olivia Wirth as Executive Chair, presumably to tackle the company’s epic quest for growth, while Dr. Gary Weiss AM was promoted to Deputy Chair and Lead Independent Director. Tony Sutton, the 30-year Myer lifer, was elevated to Chief Operating Officer. Wirth officially took over as CEO and Executive Chair on June 4, 2024, with the Executive Management Group now tasked with reporting directly to her, to ensure no detail goes unnoticed in this new era of corporate enlightenment.
Despite the headwinds, Myer’s efforts to maintain operational efficiency and adapt to the evolving retail landscape stand out. The Company’s focus on optimising costs, managing inventory tightly, and leveraging their loyalty program are key moves aimed at weathering the tough economic climate.
Myer Executive Chair, Olivia Wirth, commented: “In the current challenging trading conditions, we are acutely focused on optimising operational performance including tightly managing costs, inventory, and margins and fully leveraging our MYER one loyalty program.”
In the second half of FY24, the group expects comparable sales to rise by 0.8% compared to the second half of FY23. This is a marginal improvement from the first half of FY24, where comparable sales increased by only 0.1% on the same period in FY23.
“The second half sales performance demonstrates resilience in the face of a difficult trading environment for Myer and the wider retail sector, coupled most notably with the closure of our Brisbane CBD store and the underperformance of the sass & bide, Marcs and David Lawrence brands” Wirth added.
With a 2% growth in online sales, reaching a total of $704 million, Company’s overall sales declined by 2.9% to $3.266 billion due to store closures and economic challenges. The Company expects a significant drop in net profit after tax (NPAT) to between $50 million and $54 million, due to inflationary pressures, and underperformance in key brands.
In the latest twist of retail challenges, Myer has managed inventory levels through careful management and introducing new product lines. The Company is now focused on finalising its FY24 results, which will be released in September 2024.
With plans for growth in mind, Wirth stated, “We are also positioning the business for growth and are well progressed in a comprehensive strategic review of the business. We look forward to discussing the strategic review at an investor presentation in October.”
For the half-year ended January 27, 2024, Myer reported total sales of $1.83 billion which represented a decrease from $1.88 billion in the previous half-year period ended January 28, 2023. This resulted in gross profit of $665.1 million.
As of January 27, 2024, the Company had $50.5 million in profit, with basic earnings per share at 6.1 cents and diluted earnings per share at 6.0 cents.
Sidra is a Business Writer with The Sentiment
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1 Comment
Shraddha13
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