Myer’s sales fall despite return to profit

Myer has reported a net profit of $38.4 million for the crucial Christmas trading period despite sales continuing to fall for the struggling department store.

Myer has returned to profit but sales have fallen.

Myer has returned to profit but sales have fallen.

The struggling department store chain this morning reported a net profit of $38.4 million for the 26 weeks to January 26.

The result takes in the crucial Christmas trading period and the update comes as Myer fends off attempts by its biggest shareholder, retail billionaire Solomon Lew, to overthrow the board.

The latest result is a turnaround from a $476.2 million loss Myer posted in the same period a year earlier when it was hit with major writedowns to the value of its brand.

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Underlying profit, which strips out one offs such as restructuring costs, rose 3.1 per cent to $41.3 million for its latest first half result.

Total sales fell 2.8 per cent to $1.67 billion

But the rate of the sales slide has slowed from 4.8 per cent in the first quarter to 1.4 per cent in the second quarter.

Like-for-like sales, a closely watched industry metric which strips out the impact of stores opening and closing, were down 2.3 per cent.

Myer said it has improved its gross profit margin by 99 basis points.

Myer chief executive John King, said the result demonstrates the positive customer response to a number of initiatives from its customer first plan, particularly during the all-important Christmas and Myer sale periods.

Myer reported a net profit of $38.4 million for the 26 weeks to January 26.

“There are a number of customer first pilots underway across multiple stores to determine the customer response to new brands, preferred store layouts, brand adjacencies and marketing, which will enable us to roll out these improvements to further stores,” Mr King said.

“There is a strong focus across the entire business on reducing costs that do not directly benefit the customer or enhance their experience in-store or online. We have put in place a more streamlined and accountable structure in the support office which is delivering positive results and we have identified numerous other cost saving opportunities across the business which may be material in future years.”

Mr Lew is the biggest investor in Premier Investments whose retail portfolio includes Smiggle, Peter Alexander and Just Jeans.

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