Myer reports 40 per cent slump in FY25 half-year profits

Iconic department store Myer has suffered a sharp slump in profits as it struggles to reset its business.

Iconic department store giant Myer has reported a crash in half-year profits, with the company blaming “cautious” shoppers and a troubled business reset for the slump.

The company announced $30m in net profits for the six months to December 31, 2024, a 40 per cent decline on the prior period.

Total revenues were flat at $1.83bn.

The company credited a “tough macro environment” and complications at its new Ravenhall National Distribution Centre in Victoria for the profit hit.

“The NDC went live in August 2024, however, the site has experienced implementation issues and is not yet operating as designed,” Myer stated on Wednesday morning.

“During H125, Myer flagged implementation issues and delayed ramp-up.

“The complications created stock flow issues, including Myer Exclusive Brand stock remaining trapped in the facility during Q1 FY25 and led to online fulfilment transferring to stores.”

The company said costs and inefficiencies from the NDC rollout had stripped an estimated $12m in earnings.

“A comprehensive diagnostic review confirmed automation and integration issues, with remediation action plans currently being developed,” the company said.

Myer reported a slump in half-year profits on Wednesday morning. Picture: NewsWire/ David Crosling

The company warned the NDC would likely impact its financial performance for the second half of the financial year.

Sales for the first five weeks of 2025 were also down 2.6 per cent from the prior period, the company said.

Shares in the $1.25bn company crashed more than 4 per cent at the opening bell on Wednesday morning, but recovered in morning trade to lift 0.66 per cent by 11.30am.

The profit slump comes amid a restructure of the business following the acquisition of Apparel Brands from Solomon Lew’s Premier Investments, which gives Myer control of the Jay Jays, Just Jeans, Portmans, Dotti and Jacqui E brands.

The new Myer Group now has more than 750 department and specialty stores across Australia and New Zealand.

Combined Myer Group financials will be reported in the second half of FY25, the company said.

The results delivered some points of light for the legendary brand.

Online sales lifted 4.8 per cent to $409m, accounting for 22.3 per cent of total sales.

The company also reported 4.6 million active customers in its Myer One loyalty program, a 6 per cent year-on-year increase, including 453,000 new members.

Myer has recorded a lift in loyalty members. Picture: NewsWire/ David Crosling

Myer executive chair Olivia Wirth said the company was focused on “resetting the business” and positioning Myer Group as a “retail powerhouse”.

“Despite challenging trading conditions in a tough macro environment and complications experienced at our national distribution centre, Myer traded well throughout the all-important Black Friday and Christmas trading periods,” she said.

“While consumers remain cautious, we reported growth in our comparable and online sales and I’m pleased to report our Myer One loyalty program delivered a record performance with 4.6 million active members and a 79 per cent tag rate.

“In a year of transition, m we remain focused on executing our strategic plans to drive growth and attractive shareholder returns.”

The company also said it had strengthened its balance sheet via “refinancing commitments for a $150m debt facility” with banking giants Commonwealth Bank and NAB.

“The refinancing is expected to deliver saving of $3m in 2H25 and annual savings thereafter of $11m and enhanced liquidity,” the company said.

Year-to-date, stock in Myer has plunged 38 per cent.

Originally published as Myer reports 40 per cent slump in FY25 half-year profits