Myer shares fall on half-year profit hit
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More news: Myer shares fell in morning trade after the department store chain recorded a 40% drop in first-half net profit, dragged down by ongoing issues at its new national distribution centre.
Myer shares were down 4% to 73 cents at 11:10am AEDT, extending losses of around 40% since the turn of the year.
Myer profit slumps 40% after distribution centre issues
The news: Department store chain Myer has reported a 40% slide in first-half net profit to $30 million, following ongoing complications and ramp-up delays at its national distribution centre.
The numbers: Myer's total sales edged up 0.1% year on year to $1.83 billion. Group comparable sales were up 0.8%, driven by the closure of its Brisbane and Werribee stores, as well as 10 Sass & Bide store closures.
Cost of doing business increased 1.9% to $457.8 million, reflecting inflationary cost pressures, higher employee costs and higher support office costs.
The context: Myer's executive chair Olivia Wirth said the company has concluded a group-wide strategic review and started to implement a growth strategy. This has included the acquisition of Premier Investments' Apparel Brands business, changes to its leadership team, and a restructure of its Sass & Bide, Marcs and David Lawrence brands.
Wirth noted the company was impacted during the half by "challenging trading conditions in a tough macro environment", as well as complications at its national distribution centre.
Myer's new national distribution centre in Victoria went live last August, but the company later warned that it experienced "implementation issues" and is still not "operating as designed". The complications created stock flow issues, including certain stock remaining trapped in the facility during the first quarter.
The retailer said the issues resulted in increased costs and inefficiencies, leading to a $12 million impact on first-half earnings before interest and taxes.
The source: ASX
