David Jones and Country Road Group's parent company Woolworths Holdings (South Africa) has revealed how lockdowns, a lack of JobKeeper support and no rent relief impacted the businesses in the first half.
With 70% of bricks-and-mortar sales impacted by government enforced lockdowns, both businesses sales declined in H1 FY22.
David Jones' (DJ) turnover and concession sales declined by 9.2% and by 9.0% in comparable stores, but accelerated in the last six weeks, increasing by 3.2%.
Similarly, Country Road Group's (CRG) sales declined by 3.1% and by 3.2% in comparable stores but grew by 1.7% in the last six weeks of the period.
"Trade was significantly impacted by government-imposed COVID restrictions across the region," Woolworths Holdings said in a statement.
"[However] the easing of restrictions and reopening of stores, coupled with pent-up consumer demand, delivered positive sales growth in the last six weeks of the period, notwithstanding the shift of Boxing Day sales into the second half of this financial year versus the first half of the prior period," the business said.
With stores closed during the half, both DJ and CRGs digital sales lifted.
DJ reported a 44.2% lift in online sales which accounted for 28.1% to total sales during the period.
Meanwhile, CRG's digital sales increased by 3.6% and contributed 33.8% to total sales in the half.
Both DJ and CRG also reduced their trading space in the half, with space down 5.8% and 7.4% respectively on the prior period.
Where the businesses differ is in gross profit margin and expenses.
DJ was able to increase its gross profit margin by 20bps to 35.0%, as a result of reduced markdowns, an improved inventory position and the timing of the Boxing Day sale.
However, CRG's gross profit margin suffered under increased freight and online fulfilment costs, declining 50bps to 59.5%.
DJ expenses declined by 1.8% in the half due to store closures, space reduction and cost-out initiatives.
CRG's expenses increased by 15.8%, as a result of the COVID-related government support and rent relief benefits in the prior year.
Both retailers' adjusted operating profit declined in the half, with DJ reporting a 44.6% fall to $31 million and CRG recording a 48.9% decline to $48 million.
Woolworths Holdings added that while footfall may remain lower in CBD centres, the overall outlook for the second half is positive.
"Trading conditions are expected to improve in Australia, post the Omicron peak at the beginning of the second half, as restrictions ease and consumer confidence recovers.
"Footfall in stores is also expected to improve, albeit that it is likely to remain below pre-Covid levels, particularly in CBD areas.
"Whilst the prospect of rising interest rates will have some impact, the underlying fundamentals of the economy are sound with record low unemployment, rising wages and a robust housing market.
"We remain steadfast and focused on the execution of our strategies and deliberate in our drive for sustainable growth and sound capital management across the Group.
"We have a strong balance sheet, which provides a solid foundation for future investment for profitable growth," the business said.