Myer sunk over 11% this week after the department store released its first-half profit results. While headlined with a net profit of $43 million up 8%, sales shrank 13% to $1.4 billion, continuing a trend of declines since 2016.
Sales during the period were impacted by several macro headwinds including widespread government-mandated store closures and travel restrictions which, combined with customer concerns relating to COVID19, led to reduced foot traffic in many stores
While overall revenues have continued to decline, the company did flag Online sales were stronger, rising 71% to $287.6 million. The online channel delivered significant growth throughout the period and record sales during the Black Friday 4-day sale period, as a result of extensive improvements to the website undertaken during the past three years
There were savings in the cost of doing business across stores and support office, including $18 million in rent and outgoings waivers which were granted during the period. The Australian Government’s JobKeeper Payment Scheme also made a significant contribution. Myer recognised a total of $51 million in JobKeeper payments to employees either directly or through subsidised wages.
As a result, Myer saw both its earnings (EBIT) and profits (NPAT) improve, coming in at $109.0 million and $43.0 million respectively. Net cash doubled hitting $201.1 million, up from $98.2 million.
Despite its cash position and stronger earnings, the Board said that its dividend would remain suspended, with no commentary on when the payments may resume. Myer last paid a dividend in 2017.
Myer’s Chief Executive Officer and Managing Director, John King, said: “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.”