Myer profit slides by 28 per cent

Myer boss Olivia Wirth has revealed turnaround plans, and the retailer cut its dividend, as impairments and tough trading conditions wreak havoc.

Myer’s recently appointed executive chairman Olivia Wirth has revealed her plans to return the department store business to sustainable growth after the company lodged a 28 per cent slide in net profit.

Wirth’s ‘Myer Tomorrow’ plans will include stronger cost controls, cracking down on in-store theft, better use of promotions and unlocking the full potential of its Myer One loyalty scheme.

Unveiling the retailer’s full-year results on Friday, which showed a 28 per cent slide in net profit to $43.5m as more than $12m in impairments and tough trading conditions squeezed earnings, Ms Wirth said she sees opportunities for Myer to do better in beauty, men’s and women’s apparel and homewares.

The Myer Tomorrow strategy, revealed as part of the company’s full-year results, will seek to increase customer engagement in its Myer One program to attract new members — especially male and younger shoppers — to enhance the loyalty scheme and give Myer a greater “share of wallet”.

The Australian recently reported Ms Wirth had brought in Boston Consulting Group to help her fashion the retailer’s new strategy.

Myer One currently has 10.4 million members and grew by 706,000 in fiscal 2024, with more than 50 per cent aged under 35.

Ms Wirth’s digital strategy will focus on using data to personalise offers to Myer shoppers and improve Myer’s e-commerce platforms, while a new focus on profits and margins will see Myer be more disciplined on costs, how it spends its promotional budget, cutting down theft and making its supply chain more efficient.

Myer executive chairman Olivia Wirth has revealed her ‘Myer Tomorrow’ strategy. Picture: John Feder

As part of this strategy Ms Wirth is currently overseeing due diligence on buying a range of fashion and apparel brands from Solomon Lew’s Premier Investments, which would see Myer buy brands like Portmans, Just Jeans and Dotti and take on more than 700 stores.

Ms Wirth, who was appointed executive chairman in June having formerly run the Qantas loyalty business, is also seeking to expand Myer’s private label and exclusive brands as she gathers a broader range of profit levers to pull amid worsening trading conditions for discretionary retailers.

Soloman Lew could sell his Premier Investments’s retail apparel brands to Myer. Picture: Aaron Francis

On Friday, Myer posted a 26 per cent fall in profit before restructuring and impairments to $52.6m for the 12 months to July 27, with reported net profit down 28 per cent to $43.5m. Statutory net profit after tax of $43.5m includes $9.1m ($12.2m pre-tax) of a range of impairments and restructuring costs including impairments to its sass & bide, Marcs and David Lawrence brands.

Sales for the full-year were down 2.9 per cent to $3.226bn. The retailer said comparable sales for fiscal 2024 were up 0.4 per cent while online sales of $704.3m were up 2 per cent.

Underlying profit margins fell 12 basis points, reflecting sales mix changes, while operating gross profit fell 2.5 per cent to $1.194bn,

Myer declared a final dividend of 0.5c per share, down from 1c, payable on November 21.

“Today’s result reflects the challenging macroeconomic environment for Australian retailers,” said Ms Wirth.

“Despite the tougher trading conditions, work undertaken by the Myer team in recent years has helped stabilise the business and established a foundation for future growth. With a highly engaged customer base, a leading loyalty program, positive comparable department store sales growth and high levels of trust in the Myer brand, there are significant opportunities for growth.”

Myer said in the first seven weeks of fiscal 2025, sales were up 0.2 per cent versus the corresponding period in the prior year.

The results come as Myer considers buying Premier Investments’s retail apparel brands, which could see Myer issue shares to Premier for the acquisition.

This ultimately could see Mr Lew swap Premier Investments’s stake in Myer for a personal stake in Myer which would mean the billionaire remains Myer’s largest shareholder and be offered a seat on the board.

Myer shares dropped 9.7 per cent to 79c in early trade Friday.

Originally published as Myer profit slides by 28 per cent