Australian department store Myer is expecting a net profit after tax (NPAT) of between $69 million and $73 million in full-year 2023 despite economic headwinds.
This is an increase of between 15% and 21% from FY22.
However, NPAT was not as strong in the second half of FY23, with Myer reporting an expected profit growth of between $4 million and $8 million.
The business’s net cash position is down approximately $66 million at the end of FY23 compared to FY22 to $120 million.
Myer claimed the results come amid prevailing headwinds generated from the macroeconomic environment affecting sales, margin and costs of doing business.
The company’s total sales were up 12.5% in FY22 to $3.3 billion and 12.4% in FY19 (pre-COVID). Second-half total sales were up 0.4% on the prior corresponding period (2H FY22), and up 11.9% on 2H FY19.
The department store’s online sales were up 163.2% from pre-COVID, but down 4.5% from FY22 to $690.5 million in FY23.
Myer’s total online sales returned to a growth of 3.2% in the 2H FY23 compared to the 2H FY22.
The company noted its online sales results reflect a favourable impact of store closures in the 1H of FY22, and now represent 20.5% of total sales.
In early 2022, Myer closed its Blacktown store following four other closures since 2019. It has also exited Myer Centre in Brisbane CBD in July this year.
Meanwhile, the department store reported that its total group inventory is expected to be approximately flat to the same time last year, “mainly reflecting well-controlled intake in response to tightening trading conditions.”
Clearance inventory is at 8.0% of current department store stock on hand, compared to 5.8% in FY22.
“Myer’s Customer First Plan has continued to deliver both positive sales growth and positive profit growth in FY23, despite the prevailing macroeconomic headwinds that have buffeted the retail sector throughout the second half,” Myer CEO John King said.
“We continue to tightly manage costs, inventory and cash to ensure we have a strong balance sheet as we begin FY24 where we expect the ongoing uncertainty around the macroeconomic environment to persist.”
Following the Company’s recent announcement that King will retire from his role in 2024, the board has engaged search firm Egon Zehnder for the CEO replacement process.