Myer on track to post its highest annual profit since 2017 despite disruptions caused by Covid-19
Despite the disruptions of Covid-19, lockdowns and pressure on household budgets, Myer is on track to post its highest full-year profit since 2017. Shares soar.
Department store Myer has emerged from the Omicron wave of Covid-19, lockdowns and sinking consumer confidence with its strongest financial state for years, with its full-year net profit for 2022 forecast to double.
Myer is on track to report its strongest net profit since 2017, with its online platform driving strong sales growth and its cash on hand swelling to more than $155m.
The bullish news helped Myer shares rally more than 21 per cent to 48.5c in a slightly higher market.
Myer expects annual net profit to come in between $55m and $60m, an increase of between 86 per cent and 103 per cent from last year. The forecast is against last year’s figures, excluding the JobKeeper payments it received.
Its results in 2021 included JobKeeper payments of $22m after tax as the retailer was forced to close down its stores and send thousands of workers home due to the outbreak of Covid-19 and mandated store closures.
Myer said its second half profit for the 26 weeks to July 30 would be between $23m and $28m, up between 160 per cent and 217 per cent from $8.8m over the 27 weeks to July 31, 2021.
Helping to drive the strong uplift in profitability and sales was its online platform, with full-year online sales up between 32.5 per cent and 34.4 per cent compared to 2021, representing approximately 24 per cent of total sales – to between $715m and $725m.
Second half total sales were up 16.5 per cent to 17.3 per cent, while sales across the group for 2022 are expected to be up between 12.3 per cent and 12.7 per cent to $2.985bn and $2.995bn (for a 52 week trading period) and against sales of $2.658bn for 2021 which was a 53 week trading period.
The department store, which has been struggling for years and which is also under siege from major investor and billionaire Solomon Lew, said it expects to finish 2022 in a positive net cash position of more than $155m, compared to $112m at the end of 2021.
Stock on hand is currently 9.6 per cent higher than the same time last year, the retailer said, mainly reflecting acceleration of intake in response to global supply chain delays. Clearance inventory continues to be well managed, it added, at 6.2 per cent of current department store stock on hand.
Myer chief executive John King said execution of the Customer First Plan continues to deliver positive outcomes for the business with all categories achieving sales growth over 2021, despite more trading days lost due to Covid-19 this year.
“The momentum in the second half in terms of sales growth both in-store and online, profitability and strengthening of our balance sheet places us well as we go into the new financial year.”
Myer will release its 2022 financial results in September.
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