Nov 10, 2011
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Australia's Myer sales fall, sees 2012 profit down 10 pct

Nov 10, 2011

Australia's biggest department store chain, Myer Holdings, said same-store sales fell 5.1 percent in the first quarter and reiterated annual net profit was likely to fall as much as 10 percent.

While Australian retail sales have shown signs of recovering off a low base, sales at department stores have fallen to a record low share of retail spending, according to research by CommSec.

Myer said on Wednesday that total sales, including from newly opened stores, fell 3.5 percent to A$681.4 million ($704.7 million) in the 13 weeks to Oct 29. The decline in sales largely met analyst forecasts.

Rival department store David Jones has predicted a fall in first-half profit of 15 to 20 percent compared to a year earlier. Sales at discount department stores Big W and Target, owned by Woolworths and Wesfamers , both fell over 4 percent in the first quarter.

"As the quarter progressed sales gradually improved against last year," said Myer Chief Executive Bernie Brookes.

Trading at the flagship Myer Melbourne store was "well up on last year," he said, adding that he welcomed this month's interest rate cut heading into Christmas, the first rate cut since 2009.

Net profit could fall to as low as A$146.43 million in fiscal 2012, Myer said.

"Global and domestic economic conditions will dictate when consumer confidence returns to more normal levels," the company said.

CommSec said sales at department stores fell to a record low of 7.5 percent of total retail trade in the third quarter.

At the same time, spending at pharmacies on pharmaceuticals and cosmetics rose to a record 5.8 percent share.

($1 = 0.967 Australian Dollars) (Reporting by Miranda Maxwell; Editing by Lincoln Feast)

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