Myer shares climb despite sales and profits fall

The news: Department store chain Myer has reported a drop in total sales for the first half, crediting the hit to economy-wide inflationary pressures and increased reliance on promotions and discounts by other retailers to shift stock.

The numbers: Myer expects total sales for the half to be down 3% compared with 1H23 to $1.83 billion. However, this is 13.8% higher than pre-pandemic levels. Group online sales are expected to be up 2% to $390.1 million. The retailer said it expects a first half net profit of $49 million to $53 million, taking into account unfavourable impacts of store closures and the impact of inflationary cost pressure. Total group inventory is expected to be lower than the same time last year.

The context: Myer CEO John King said the results matched the company's best first-half sales result on record, on a comparable sales basis, and was an "encouraging result given the current economic environment." He flagged that inflationary pressures and greater promotional cadence has hit profits, and expects consumers to remain cautious in the second half. The company is looking to its loyalty program, the scaling of its national distribution centre, and the continued roll out of brand extensions and new additions to keep it well positioned in the sector.

Myer's board is still searching for a new CEO as current chief John King plans to leave the company in June.