David Jones experiences a challenging second quarter
David Jones Limited (DJS) reported Total and Like-for-Like (LFL) Sales revenue of $617.6 million for the second quarter of the 2011 year (2Q11) (being the period 31 October 2010 to 29 January 2011). This represents a Total and LFL Sales decline of 2.7% on 2Q10 using the statutory reporting periods for both 2Q11 and 2Q10.
The FY11 reporting period started one week later than FY10 due to FY10 being a 53-week year. Comparing the sales for 2Q11 to the same calendar weeks in 2Q10 (i.e. 1 November 2009 to 30 January 2010), Total and LFL Sales decreased by 1.1% (on an adjusted calendar weeks basis).
David Jones CEO, Paul Zahra said, “Whilst Sales this quarter were –1.1% our PAT Growth Guidance for 1H11 is approximately +5% and for 2H11 remains unchanged at 5% to 10%, although we expect it will be at the lower end of this range.
“We experienced a challenging second quarter with wetter and cooler weather, a decline in consumer sentiment, significant discounting in the sector in the lead up to Christmas and the impact of the Queensland floods on six of our stores.
“Consumer shopping behaviour continued to be patchy throughout 2Q11 and we have seen no material signs that this is changing. Sales on a state-by-state basis (excluding Queensland) were consistent, with no discernable trend emerging.
“Despite a very competitive retail environment in 2Q11 with heavy promotional activity by retailers, we have managed our cost position well and I am pleased to report that we have also effectively managed our Gross Profit Margin and Inventory,” Mr Zahra said.
Mr Zahra said, “I am pleased to report that on 17 February 2011 we launched our new, redeveloped Claremont Quarter (WA) store, with 85% more selling space. David Jones is the only department store in the Claremont Quarter centre, one of Australia's most affluent catchments and to date customer reaction to the store has been outstanding.”
“In addition our newly redeveloped Bourke Street Mall Melbourne CBD stores have continued to perform strongly and we have experienced an increase in foot traffic in our Sydney CBD stores as a result of the opening of the new Westfield Sydney centre.”
“Earlier today we announced that we have signed an Agreement for Lease with GPT to open a new store at their Highpoint (Vic) shopping centre. The new store will be part of a bigger development that GPT is undertaking and involves adding a new fashion wing to the centre. Work on the development is due to commence in March 2011 and the new David Jones store is expected to open for trade in the first quarter of 2013.”
“We continue to grow and evolve our Brand Portfolio having announced on 13 January 2011 the addition of 30 new department store exclusive Australian and international brands to our portfolio. In addition, our Refurbishment program is progressing well. Our Wollongong (NSW) and Kotara (NSW) stores have been successfully refurbishedand are now trading uninterrupted. We have commenced work on the major upgrades of our Chadstone (Vic) store and our Warringah Mall (NSW) store, both of which will deliver more selling space and are on track to be completed well in time for Christmas trading in 2011.”