Myer: Online Sales Up 200%, Downgrades Profit

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Myer sales dip 0.9% as “challenging” environment bites, although online up a massive 200%.

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The retailer announced third quarter sales today, which showed a slight dip in sales to $651.1m.

On a like-for-like basis, sales in the 13 weeks to April 28, fell 2.1%, although excluding Myer’s rationalised categories including white goods, games and music, sales fell 0.2%.

Myer Chief, Bernie Brookes, said the result was solid considering the very difficult trading environment in April, which has continued into May, he confirmed.

This less than stellar performance has prompted Myer to downgrade its net profit forecast for full year 2012 to $162.7m – a 15% drop.

The result “reflect[s] a very challenging trading environment and subdued consumer spending” the retailer said in a statement.

Clothing, both womenswear and mensware, were the big performers during the quarter while Stores in WA, SA and QLD performed well, while NSW and Vic less so.

The troubled retailer also said e-sales soared a whopping 200% compared to a year ago and is now placing a lot of eggs in its e-commerce offering, it confirmed:

“We have continued to make improvements to our website incorporating an increased range. We have astrong pipeline of improvements planned.”

Brookes also said feedback on its new customer services was positive and hinted economic changes including the recent rate cut may spur consumers to part with their dollars:

“Despite the challenging sales environment, we are continuing to see positive customer feedbackfrom our investment in improving service, the addition of new wanted brands, growth in our MyerExclusive Brands as well as our enhanced loyalty program.”

“While there may be a delay in any positive impacts on discretionary spend, the recent rate cut by the Reserve Bank, as well as an improving employment rate and the upcoming cessation of the flood levy, are timely as we head into the fourth quarter and the important Mid Year Stocktake Sale in June.”

 

Brookes also blamed the fallout in equity markets and the ongoing turmoil in Europe continued to influence consumer sentiment.

But the majority of net profit made in H2 comes from Myer’s Mid Year Stocktake sale, Brookes said, adding this was “disappointing” for the retailer last year.

“However, we have made a number of changes to improve the offer,” he said.

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