David Jones bottoms out

Department store David Jones has recorded a 39.9 per cent plunge in full year profit, citing tough trading conditions and deeper investment in a turnaround strategy.

David Jones reported profit after tax of $101.1 million for the fiscal year, down from $168.1 million in the previous year.

Sales revenue was down 4.8 per cent to $1.9 billion while gross profit percentage fell from 39.1 per cent to 37.5 per cent.

Earnings before interest and tax plunged from $246.5 million to $154.3 million, reflecting declining sales, lower margins and increased costs.

However, end of year inventory was 3.4 per cent lower than fiscal 2011.

Accounting for the delivery of spring/summer inventory, which the company brought forward into July, this figure falls to 7.4 per cent.

This reflects David Jones' strategy to focus on new inventory and reduce reliance on discounting.

David Jones chief executive Paul Zahra said the results were in line with guidance provided in March.

"[It] reflects the difficult trading environment during the year as well as the investment we have made in [the second half of 2012] implementing our Future Strategic Direction Plan."

The Plan includes transforming the company into an omnichannel retailer, growing its store network and strengthening its core business for the future.