Department store Myer has reported lacklustre results for the third quarter of the 2012 fiscal year, and readjusted its forecast for full-year net profit.
Third quarter total sales for the 13 weeks to April 28 came in at $651.1 million, a drop of 0.9 per cent, with sales on a like-for-like basis also down 2.1 per cent compared to last year.
Total sales excluding rationalised categories (whitegoods, movies and music, gaming, consoles, and GPS), also declined 0.2 percent, down 1.6 percent on a like-for-like basis.
However, the key categories of women’s youth (Miss Shop), womenswear and menswear were the strongest performers during the quarter, with recently launched brands such as T.M. Lewin and Elwood (menswear) and Lipsy (women’s youth) performing best.
Stores in the states of Western Australia, South Australia and Queensland also performed best, offset by the performance in both Victoria and New South Wales.
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.
“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,” he said.
“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 fourth quarter fiscal year 2011 total sales down 5.8 percent, we have made a number of changes to improve the offer.”
Going forward Brookes said that, in light of challenging and unpredictable retail environment, the company anticipates financial year 2012 net profit after tax (NPAT) to be no worse than 15 per cent below financial year 2011 ($162.7 million.
The department store had previously forecast a fall in full year net profit of no more than 10 per cent.
Brookes also revealed that the company will introduce recently purchased womenswear brand Grab into stores in August 2012 and will also extend iconic label Sass & Bide into intimates.
During the fourth quarter Myer will also commence the refurbishment of its Highpoint (Victoria) store, which will incorporate improved lighting as well as updated flooring, fixtures and fittings, with two new stores also in the pipeline.
“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,” Brookes said.