Myer says profits could be 20pc higher despite lower customer spending

afr.com:

Myer is tipping significantly higher profits for the year to the end of July after preliminary sales figures showed growth despite deteriorating trade conditions as shoppers become more cautious.

Myer said on Tuesday that total revenue – including sales from concession stores – was estimating to be up 12.5 per cent during the year to $3.36 billion when compared with 2022, and up about the same on pre-pandemic figures.

However, the department store operator warned that second half sales have ground to a halt, up just 0.4 per cent a year ago, as customers adjusted to repeated interest rate increases. Sales in the second half of the year are estimated to be up 11.9 per cent on the same period in 2019.

Myer says it will post a better than expected profit as sales have held up. Oscar Colman

Myer will eke out a small second half profit of between $4 million and $8 million. Excluding individually significant items, such as store and distribution centre exit costs, Myer’s bottom-line profit for the year ended July 29 is expected to be between $69 million and $73 million, an increase 15 per cent and 21 per cent on the prior year, the company said.

The volume of retail goods and services consumed by households fell by 0.5 per cent in the three months to June, Australian Bureau of Statistics data showed in early August with sharp falls in household goods like appliances and purchases at department stores.

Myer said full-year online sales are tipped to fall 4.5 per cent to $690.5 million, although they have returned to growth in the second half of the financial year and now represent more than 20 per cent of total sales.

Outgoing Myer chief executive John King said inventory was expected to be flat to the same time last year. But