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Myer delivers solid result in challenging environment

23
May '12
Myer Holdings Limited (MYR) reported third quarter total sales for the 13 weeks to 28 April 2012 of $651.1 million, down 0.9 percent compared to last year. On a like-for-like basis, sales were down 2.1 percent compared to last year.

Total sales excluding rationalised categories (whitegoods, movies and music, gaming, consoles, and GPS), were down 0.2 percent, down 1.6 percent on a like-for-like basis. Trading over the third quarter was mixed, with a significant deterioration in April, reflecting a very challenging trading environment and subdued consumer sentiment.

The key categories of Women's Youth (Miss Shop), Womenswear and Menswear were the strongest performers during the quarter. The best performing states of Western Australia, South Australia and Queensland were offset by the performance in both Victoria and New South Wales.

The recently completed refurbishment of our Carindale (Queensland) store has delivered a new cosmetics hall as well as new fixtures, fittings, flooring and lighting throughout. A number of new brands were introduced into the store including Marcs, Karen Millen, Manning Cartell, and Aurelio Costarella in Womenswear, MAC Cosmetics, Benefit, Kiehl's, SK-II and YSL Beauty in Cosmetics and R.M. Williams, R & G, G-Star, Elwood and Dom Bagnato in Menswear. Trading and customer feedback since the relaunch have been very positive.

Myer Chief Executive Officer, Bernie Brookes, said that the result was solid considering the very difficult trading environment in April, which has continued in the first few weeks of the fourth quarter.

During the fourth quarter, we will commence the refurbishment of our Highpoint (Victoria) store, which will incorporate improved lighting as well as updated flooring, fixtures and fittings. We are looking forward to opening our next two new stores at Fountain Gate (Victoria) in September and at Townsville (Queensland) in October. Recruitment and plans for opening these stores are progressing well.

We have been particularly pleased with the performance of a number of brands that have recently been launched in Myer as department store exclusive including T.M. Lewin and Elwood (Menswear) and Lipsy (Women's Youth).

We recently purchased the well-established Womenswear brand Grab, which will be introduced in our stores in August 2012. We are also looking forward to the brand extension of sass & bide into intimates.

Our online sales continue to grow at over 200 percent compared to last year and we have continued to make improvements to our website incorporating an increased range. We have a strong pipeline of improvements planned.

“Despite the challenging sales environment, we are continuing to see positive customer feedback from our investment in improving service, the addition of new wanted brands, growth in our Myer Exclusive 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. However, the fallout in equity markets and the ongoing turmoil in Europe continue to influence consumer sentiment.

“The majority of the second half net profit is made in the Mid Year Stocktake sale. While this sale was disappointing in 2011 with Q4FY2011 total sales down 5.8 percent, we have made a number of changes to improve the offer,” he said.

In light of all these factors and the very challenging and unpredictable retail environment being experienced across the sector, we now anticipate FY2012 NPAT to be no worse than 15 percent below FY2011 ($162.7 million).

Myer Holdings Limited


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