By Daniel Lo Surdo
Myer shares have plummeted by more than a fifth after the retail giant said sales shrank in the second half of 2024, a period covering the key Christmas and Black Friday trading periods.
In an update to the ASX on Monday, Myer said total sales had reached $1.59 billion in the six months to December 28, or 0.8 per cent less than that recorded in the same period a year earlier; total group sales had kept “in line” with company expectations.
Myer shares crashed 23.1 per cent to 88¢ amid analyst warnings that the figures underlined a tough retail backdrop.
Myer has confirmed its sales shrank in the second half of 2024.Credit: Luis Enrique Ascui
Greater consumer caution was cited among reasons for the sales dip, with executive chair Olivia Wirth, who joined Myer from Qantas in October 2023, noting a “challenging trading environment” buoyed by inflationary challenges had been a drag on the retail sector.
“In challenging trading conditions for the retail sector, driven by a tough macroeconomic environment, Myer’s year-to-date sales performance has been stable,” Wirth said.
“Trading during last year’s key sales events, including Black Friday, was strong, but consumers remain cautious and focused on value given persistent cost-of-living pressures.”
The numbers were released alongside a downbeat trading update from Premier Investments, chaired by billionaire retail veteran Solomon Lew, who is also Myer’s biggest shareholder.
Myer intends to add Premier’s clothing businesses, including Just Jeans, Jay Jays, Portmans and Dotti, to its retail empire in a merger that would add 719 new stores to Myer as Premier directs greater focus on its Smiggle and Peter Alexander brands. Shareholders will vote on the intended merger on January 23.
Premier projected global sales of up to $865 million in the six months to January 25, following a successful summer retail period that included Boxing Day and back-to-school trade, though it also shared the challenges presented by consumers maintaining a “strong focus on value”.
Global sales for Premier’s clothing businesses are expected to land between $405 million and $412 million, with the group expecting results “broadly flat against the prior corresponding period”. Premier shares also plunged, down 15.9 per cent.
Morningstar analyst Johannes Faul said the results showed “consumers are still hurting, and budgets are tight”.
“We’re seeing costs going up still, spending staying low, and that’s really impacting profits,” Faul said. “It’s not great out there, but it’s not doom time.”
eToro market analyst Josh Gilbert agreed, saying: “We’ve seen, over time, how important discounts have been and how they can impact businesses as well.
“Consumers are looking to discount and find value … I definitely think we’ve seen that in the retail numbers.”
Despite the Myer and Premier numbers, MST Marquee senior analyst Craig Woolford was optimistic about the wider retail sector, saying present challenges could be allayed by recent increases in spending and lower inflation.
“For most retailers, it was a good Christmas,” Woolford said. “Sales trends have generally been improving.”
AMP deputy chief economist Diana Mousina said Myer’s announcement was “not telling us anything that we didn’t already know about the retail environment in Australia”, where spending was increasingly strained.
“Consumers have made quite significant cutbacks in the past 18 months on retail goods,” she said. “It’s not surprising to me that we’re seeing these challenging results – it’s symptomatic of the retail environment for consumers.”
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