Brokers appear to remain cautiously optimistic on Myer, despite the department store/retail group posting troubling performance statistics in its full-year preliminary results.
At least two investment banks think Myer’s current historically low share price is due for a bump up in the next 12 months, with one telling investors to buy it now.
This week, Myer Group – consisting of both the department store and Apparel Brands – reported soft comparable sales growth and a pro forma profit slip over the FY26 trading period, with the second half proving to be volatile.
In its FY26 preliminary trading update this morning, the company reported total sales for the year of just over $4 billion. On a pro forma basis, which includes only six months of Apparel Brands in FY26 – being Just Jeans, Jays Jays, Jacqui E, Dotti and Portmans – total group sales were up just 0.3 per cent.
Myer Retail – excluding Apparel Brands – saw total sales rise 0.7 per cent, with comp sales up 1 per cent. For Apparel Brands, pro forma total sales were down 1.3 per cent, with comp sales down 0.3 per cent.
Morgan Stanley agreed with Myer’s view that sales would have been impacted by higher fuel prices, three interest rate rises this year, associated household income pressures and a warmer-than-average start to winter.
“Commentary [by Myer] broadly consistent with our channel checks, which suggests a soft consumer has been compounded by weather and more aggressive discounting from Amazon through Prime Day in July,” the investment bank shared.
Morgan Stanley also noted that Myer Group’s FY26 gross profit guidance is around 2.6 per cent below consensus. The group expects gross profit to hit between $1,601 million and $1,607 million. This was impacted by higher promotional activity.
Meanwhile, analysts at Canaccord Genuity pointed to “comforting” elements in Myer’s trading update this week. Canaccord confirmed that Myer’s CODB guidance is in line with its estimates. Myer Group guided that CODB as a percentage of sales should hit around 29 per cent, despite the weaker top-line.
The second investment bank told investors that CODB management has been sound across Myer’s Sass & Bide, Marcs and David Lawrence investments – with the company closing operations for the first, pending an expected relaunch – alongside sourcing and procurement benefits as Apparel Brands settles into the operational structure.
But Canaccord added that fixed cost base sees wider misses down the P&L – or profit/loss.
“With weaker trade through EOFY sales, we surmise closing inventory may be higher than we previously forecast,” the bank noted.
Canaccord also pointed to loyalty program engagement momentum, with Myer Retail (excluding Apparel Brands) having a tag rate of 81.5 per cent, with 5.3 million active members.
But, to Canaccord, a challenged consumer backdrop remains the watch point as the company moves closer to seasonally important trade periods – Black Friday, Cyber Monday and the lead-up to Christmas 2026.
“Apparel Brands write-downs and additional Significant Items seem likely to us given the context of recent performance,” Canaccord concluded.
“In all, progress in executing against strategic initiatives looks to be playing through but dampened by a more challenging backdrop. With a net cash balance sheet and loyalty program engagement momentum, we continue to have belief in the significant potential operating earnings platform for the group.”
Canaccord’s target price for Myer is $0.53, which is down 10 cents from its last review, with the bank maintaining a buy rating.
Morgan Stanley’s target price, meanwhile, is $0.55, as it rates the stock as overweight – meaning they believe Myer will perform better than peers in the next twelve months.
With Myer’s current share price of $0.22 down 55 per cent since January this year, and down from its recent peak of $1.26 in December 2024, it is likely analysts see this as no way to go but up.