Department store Myer has revealed a modest profit rise for the first half of fiscal 2013, with fashion categories at the forefront of its success.
The company, which suffered a 19.8 per cent drop in the previous corresponding period, today reported a lift in net profit after tax of 0.7 per cent to $87.9 million.
Sales, for the 26 weeks ended January 26 2013, also increased 1.7 per cent. This represents a rise of 1.4 per cent on a comparable store sales basis.
Operating gross profit increased 2.3 per cent to $714.0 million, with earnings before interest, tax, depreciation, amortisation (EBITDA) up 1.4 per cent to $185.4 million. Earnings before interest and tax (EBIT), however, saw a slight drop of 1.0 per cent to $141.5 million.
Second quarter sales are also showing promise, with the retailer's sales for the second quarter up 2.1 per cent to $1,044.4 million – an increase of 1.7 per cent on a comparable store sales basis.
The best performing categories for the period have emerged as Menswear, Cosmetics, Womenswear, Fashion Accessories and Childrenswear, with both sales and profit figures well ahead of last year.
The best performing states were Western Australia and Queensland.
Concession sales also grew by 4.9 percent, particularly driven by brands such as Country Road, Sunglass Hut, Sportscraft and Review.
A number of Myer Exclusive Brands have also performed well, according to the company, supported by the extension of these brands into new categories.
Sales for Myer Exclusive Brands grew by approximately 10 per cent to $343 million during the half. The category now represents 19.8 percent of sales for the retailer – up from 18.3 percent at the same time last year.
In addition, a number of new brands were introduced in the half, including Trent Nathan, Jag handbags, Australian House and Garden, Sass & Bide intimates, and Material World by Madonna.
Myer was also recently awarded as the Australian Department Store of the Year in the Roy Morgan Customer Satisfaction Awards 2012, voted by over 50,000 Australian survey respondents.
Commenting on Myer's coup, CEO Bernie Brookes said the business had delivered a solid first half result, including a strong second quarter which reflected a well planned and executed Christmas and Stocktake trading period.
He added that, regardless of the ongoing challenging retail environment, the result also demonstrates the successful execution of the retailer's five-point strategy.
“We are pleased that the positive sales trend continued during the half, with the second quarter representing our third consecutive quarter of positive comparative store sales growth.
“The exit and rationalisation of categories including whitegoods, gaming and consoles, CDs and DVDs, that we commenced in 2010 has been completed with the space reallocated to higher margin fashion categories,” he said.
“We have strengthened our merchandise offer with the introduction of new brands and the expansion of a number of established brands into new categories.”
Brookes also credited local designer label Sass & Bide for its wide-spread appeal to customers and strong sales results.
“Our investment in the Sass & Bide business again proved beneficial with another very strong half, demonstrating our ability to invest in and develop brands.
"The business delivered double-digit sales growth as customers continue to embrace this exciting Australian designer offer in Myer stores and across all Sass & Bide channels,” he said.
Going forward, Brookes indicated that Myer will continue to work on its omni-channel offer, in addition to retail expansion.
He said online sales continued to grow strongly and accelerated over the Christmas and Stocktake period.
Figures indicate that the Myer site has received over eight million visits and 90 million page views during the past six months.
On the retail front, the company will re-launch the recent refurbished Highpoint (Victoria) store this week, with a number of new brands, refreshed fixtures and fittings, and an improved floor layout.
A significant refurbishment of the Myer store at Indooroopilly (Queensland) has also commenced, and is scheduled for re-launch in early 2014.
In addition, Myer has flagged a major upgrade of its CBD store in Adelaide (South Australia) with work to be completed in early 2014.
A refurbishment of the Miranda (New South Wales) Myer store has also commenced and is scheduled to be completed for Christmas 2014.