Have you skipped online checkouts for in-person queues lately? With the end of pandemic lockdowns, many Myer (ASX: MYR) customers have, thus driving the department store’s in-person sales up 38% in the five months leading to December 2022.
Subsequently, the retailer’s online sales were down 9.4%. Not only does this represent customers’ return to stores after Covid, but it also signals the decline of online shopping. The eCommerce bust is not exclusive to Myer. Over the past few months, tech giants like Amazon (arguably the largest e-commerce platform) and Meta have had to lay off employees after getting carried away by online shopping’s boom during the pandemic.
Myer’s situation is not so dire; in fact, its total sales soared 24.8% even as its online arm waned. The Company’s sales surpassed pre-Covid levels, with total sales up 18.9% on 1H FY20 and 14.3% on 1H FY19.
Plus, its sales are not all thanks to the Christmas and Boxing Day offers. In the six weeks up to December 24, 2022, Myer’s sales were up 8.7% on the prior corresponding period.
Myer CEO, John King, commented, “The results, which reflect our best sales on record for the first five months, are particularly pleasing and more importantly also reflect improved profitability within the business.”
In the first half of 2022, spurred by Omicron closures and subsequently affected Christmas and stocktake sales, the Company’s financials were negatively impacted. Its net profit was down 24.7% by January 2022. However, any in-store losses and lost trading days were offset by online sales. Now, the opposite is happening—sort of like a yin and yang situation.
At the time, due to supply chain delays and store closures, the Company, like many others, had excess stock that just wasn’t moving. Things have changed now as Myer reports its stocktake sales outperforming the prior corresponding period.
In keeping with that, Myer expects its first half FY23 net profit to be in the range of $61 million to $66 million, up around 100 per cent over 1H FY22 or 54% to 67% t higher than 1H FY20 pre-COVID levels (Perhaps the rise in NPAT translates to an increase in dividends for shareholders?). As its Stocktake sale period continues and Myer’s interim reporting period concludes on 28 January 2023, the Company hopes to bring in enough cash to meet its expectations.
In FY22, Myer earned a profit of $49 million, a 5.7% increase on FY21. Its second-half FY22 NPAT represented the best second-half NPAT it has seen since 2H FY13. Now, the Company is aiming higher and considering its in-person success, it might even get there. Still, Myer is not letting the ongoing positive momentum get to its head just yet.
King added, “As with most retailers, we remain cautious on the macroeconomic environment for the remainder of the calendar year but are equally confident in the continuing momentum we have within the Customer First Plan and a range of initiatives we are executing.”
To make the most of its in-person presence, Myer plans on improving the in-store experience, refocusing its merchandise, and engaging customers through loyalty programs.
Myer will release its interim results by March 2023.
Alinda is a Business Reporter for The Sentiment
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