Department store chain Myer (ASX: MYR) has been in the business since 1900 and floated on the ASX in 2009. The Company has had a long journey, and in FY23 ending July 2023, the Company reported total sales of $3.36 billion, its highest since 2005. A milestone.
The result includes the scale of its online business, too, amounting to $691 million (20.5% of total sales) combined with productivity gains made in physical stores up 10% since pre-Covid (FY19).
Even so, the Company has not been exempt from the aftermath of Covid and ongoing inflation. Sales in the second half remained flat, showing a deterioration of trading conditions in Q4 as macro-economic factors—inflation, high prices, rising cost of living—impacted consumer demand. The Company’s online sales of $690.5 million actually represented a decline of 4.5%, cycling mandatory store closures during Covid. Plus, its EBITDA remained flat compared to FY22.
Myer’s cost of doing business stood at $824.1 million or 24.5% of total sales, representing an improvement of 42 basis points YoY.
Myer’s CEO, John King, commented, “In line with our trading update issued on 8 August 2023, we are pleased with the strength and quality of our Full Year result, which, despite a softer trading outcome in Q4 as a result of current economic conditions, not only delivered our best full year sales result since 2005, but also showed continued profitability and a strong balance sheet providing a solid foundation to deliver our future plans and growth opportunities under our successful Customer First Plan.”
The Company’s net profit boasted an 18.2% increase to $71.1 million, and that is thanks in part to the Customer First Plan. Accordingly, MYER one performed well across the key metrics, with 720,000 new members, highest ever tag rate (74.6%, highest since it listed in 2009) and largest active customer number. The Company also added new partners to the Program, including American Express and Virgin Velocity and the expansion of the CommBank program.
King added, “Our multi-channel offer is a key strength of these results as we capitalised on customers returning to stores after closures in the prior year, underpinned by our leading customer loyalty proposition in MYER one. Our online offer is a scale business that returned to growth in the second half and has continued to increase market share throughout FY23.”
As the tumultousness of online sales continues, Myer has undertaken some initiatives to address increasing costs. It has boosted in-store technology and shrinkage investments, and space reduction and productivity activities. Plus, its rollout of the Country Road Group of brands has begun, representing a significant sales opportunity
“This year, we distributed $86 million of dividends to our shareholders, which demonstrates the confidence in the Plan and the Myer business,” King noted.
Besides that, Myer also saw some leadership changes. In early 2024, Nigel Chadwick will retire from his role as Myer’s Chief Financial Officer and will be succeeded by Deputy CFO, Matt Jackman, with Matt’s appointment to take effect from February 1, 2024.
Even in a tough environment, Myer is enjoying the perks of being a seasoned retail player. The Company ended FY23 with $120 million in net cash.
Alinda is a Business Reporter for The Sentiment
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