Department store Myer has reported resilient sales for FY25, but it was not enough to offset a profitability drag brought on by a subdued consumer environment and a $213 million impairment charge against its Apparel Brands acquisition.
In a trading update this morning, Myer’s total sales were up 0.5 per cent to $3.67 billion for FY25 on a pro forma basis, and up 1.7 per cent in the second half. The second half is the first period that includes revenue from the five retailers under Apparel Brands – Jay Jays, Jacqui E, Just Jeans, Dotti and Portmans.
Across Myer's categories – including Sass & Bide, Marcs and David Lawrence and excluding Apparel Brands – homewares led the charge in full-year, with sales up 7.4 per cent. Beauty was also up by 0.8 per cent. However, fashion sales were more subdued, with kids down 1.7 per cent, womenswear down 1 per cent and menswear remaining flat.
Myer also reported sales movements across Apparel Brands for the second half of FY25, with Portmans the only brand to report growth, up 1.3 per cent. Jay Jays was flat, Just Jeans fell 0.3 per cent, Jacqui E slipped 0.7 per cent, while Dotti plummeted by 8.9 per cent. Total sales for Apparel Brands in the second half were $400 million.
Despite the overall sales lift, profitability dragged on earnings, with Myer reporting subdued consumer demand and increased promotional activity. Earnings before interest and tax was 13.8 per cent lower, reflecting the inclusion of Apparel Brands more than offset by challenged retail conditions which impacted profitability and increased costs of doing business, affecting both businesses.
Myer also reported a $213.3 million non-cash impairment of Apparel Brands goodwill arising as part of acquisition accounting, which requires the purchase consideration to be valued using the closing share price at acquisition date.
The Myer share price at the time of completing the Apparel Brand transaction with Premier Investments was 98.5 cents compared to 64.5 cents at the time of announcing the transaction on June 24, 2024.
Meanwhile, a further $34.7 million added to the profitability drag, reflecting a period of significant transition and merger integration.
Minus the above significant items, Myer’s net profit after tax (NPAT) was $36.8 million. Statutory NPAT was negative $211.2 million.
No final dividend was declared, which follows a 2.5 cents per share pre-completion dividend paid in March 2025.
“FY25 was a transition year for Myer Group as we reset the base to position the business for long-term growth,” Myer executive chair Olivia Wirth said. “Despite challenging macroeconomic conditions and tough retail markets in Australia and New Zealand, we achieved positive sales growth in our first period as a combined group.
Profitability aside, sales continued to flourish in the new financial year, with Myer reporting a 3.1 per cent revenue increase in the first seven weeks of FY26 compared to the same period last year.
Wirth added that the group is also making progress in its growth strategy, which she said involves building a diversified omni-channel retail stable.
“We have started to see the benefits flowing through from the integration of Apparel Brands and are continuing to target identified synergies,” Wirth said. “The addition of Apparel Brands represents a significant diversification of our sales with 26 per cent of sales now coming from brands owned by Myer Group.”
Myer also owns Sass & Bide, Marcs and David Lawrence.
Within the strategy ahead, Myer has rolled out its Myer One loyalty program across the Apparel Brands, with an overall Myer One relaunch on track for October. Just Jeans has a new format store rollout, with Wirth also noting the introduction of new brand partners and welcoming back brands returning to Myer Retail.
The Myer One program now has a record 4.7 million active members, as well as a high tag rate.
Wirth added that Myer has completed a review of its national distribution centre to address operational challenges. Myer faced implementation issues and a delayed ramp up with the NDC in the first half of FY25.
The complications created stock flow issues, including Myer Exclusive Brand (MEB) stock remaining trapped in the facility during Q1 FY25 and led to online fulfilment transferring to stores, the group had reported.
Wirth said Myer now has temporary measures in place to manage its next peak periods through Black Friday, Christmas and Boxing Day, and developed a long-term solution for the NDC.
“When fully operating, the NDC will underpin our omni-channel network strategy and produce substantial cost and efficiency benefits for the business and improve the experience for customers,” Wirth said.
Despite the positive growth in sales in early FY26, Wirth added her team is cautiously optimistic about the year ahead, with emerging pockets of improving consumer strength.
“We also expect to see a return on the enhancements and investments we have made to strengthen the group and offset ongoing cost of doing business headwinds.”