A combination of Myer's strong digital sales and positive performance from its suburban and regional stores, helped the business weather the impacts from COVID-19, the retailer has reported.
The department store reported that online sales lifted 71% to $287.6 million in the first half of FY21, and accounted for 21% of total sales.
Meanwhile, total sales declined 13.1% in the half, to $1.4 billion, significantly impacted by the reduced foot traffic to CBD stores across Melbourne, Sydney and Brisbane.
Feeling the effects of a reduced workforce, tourism and subdued confidence from continued shutdowns, Myer saw its CBD comparable store sales slip 32% in the half, with overall comparable store sales declining 3.1%.
However, while the city stores were suffering, some of Myer's suburban and regional stores were performing well, with 11 stores delivering increased sales during the half.
In fact, when CBD stores are excluded, Myer's comparable store sales would have been up 6.3% for the period.
Alongside the suburban stores and digital performance, Myer CEO John King also highlights the businesses focus on costs as a positive outcome from the half.
"The first half result reflects several positive achievements including the continued strength of our online business, now representing 21% of total sales, as well as sustained disciplined management of costs, cash and inventory.
"We have now delivered five consecutive halves of reduced operating costs which, combined with a significantly improved balance sheet, has ensured the Company was able to withstand this challenging operating environment," he said.
Myer reported that cost of doing business (CODB) was down $86 million (20.9%) to $325.2 million, including JobKeeper wage subsidy and rent waivers.
Included in CODB was $18 million in rent and outgoings waivers which were granted during the period, a portion of which related to COVID-19 store closures which occurred in 2H20, and the remaining benefit of the first phase of the Australian Government’s JobKeeper Payment Scheme.
Myer recognised a total of $51 million of JobKeeper relating to August and September which was paid to employees either directly ($19m) or through subsidised wages ($32m).
The retailer also reported that net cash improved by $98.2 million to $201.1 million and that inventory was down 22% at the end of the period.
In the online side, Myer also was able to reduce costs through a range of supply chain improvements.
One such example is its 3PL being able to fulfil 25% of orders at a lower cost per order, which helped to improve the customer experience and profitability for the online channel.
Meanwhile, the business also reported that its Myer One members accounted for 69.2% of total sales at the end of the period.
"The valuable data and insights from Myer One are being used to improve buying and enable further improvements to marketing, with increasingly personalised and targeted offers replacing the previous more expensive mass marketing," the business said.
King added that the business remains focused on its transformation strategy going forward.
"The focus remains on profitable sales and executing the Customer First Plan, which has been adapted to respond to COVID-19 by accelerating, re-sequencing and expanding various initiatives.
"The strengthened balance sheet provides a solid platform for investing in our digital growth engine which represents a significant opportunity," he said.
Overall, Myer reported that Operating Gross Profit (OGP) margin declined by 55 basis points to 38.6% due in part to lower margin sales in apparel categories early in 1H21.
The retailer reported a 1.7% decline in EBITDA to $214.6 million, while EBIT increased by 2.7% to $109.0 million and EBIT margin increased by 120 basis points to 7.8%.
Statutory net profit after tax was up 76.3% to $43.0 million for the half.
Myer's dividend remains suspended.