Department store Myer’s total sales slipped 3 per cent to $1.82 million for the first half of FY24.
This was offset by a 0.1 per cent lift in comparable store sales, with CBD stores pushing up 0.8 per cent - minus the Brisbane CBD store closure last year.
Sales improved in the second half, with total sales up 2 per cent for the first six weeks of 2024, and comparable sales up 4.9 per cent.
Myer CEO John King said its Customer First Plan, which covers various aspects of the business across online, in-store and the back-end, is continuing to deliver results despite the macroeconomic conditions.
“We were able to achieve a strong comparable sales outcome, cycling our best ever 1st half sales on record in FY2023 and saw improvements in our market share across both stores and online,” King said.
“Our underlying profit result has remained robust despite the impacts from our Brisbane Store closure and increased promotional cadence. The ramp up of our new National Distribution Centre (NDC) in Q4, continued roll out of new shopping experiences and brands, tight inventory management and continued focus on newness in 2H, will help with momentum into the second half.
“Our value proposition remains strong, with continued strength in MYER one, which is delivering record engagement, a growing multi-channel offer and a strong pipeline of new initiatives seeing an encouraging department stores comparable sales result into the first six weeks of 2H at +4.9%.”
Myer’s group online sales were $390.1 million for the first half, up 2 per cent, and now representing 21.3 per cent of total sales.
Operating gross profit (OGP) reduced 2.7 per cent to $665.1 million, while the gross margin rate increased by 11 basis points (bps) to 36.4 per cent. Excluding a reclassification adjustment of delivery income, Myer reported that the underlying margin rate declined 20bps reflecting product mix changes and promotional cadence.
Meanwhile, Myer’s cost of doing business (COBD) increased $6.9 million to $449.4 million. The department store noted this was broadly flat if the delivery income reclassification was excluded, reflecting the focus on mitigating cost increases, including the favourable impact on CODB of the store closures.
Looking ahead, Myer’s new NDC scale-up of automation process for online fulfilment and national store replenishment commences in March 2024, while its new Queensland distribution centre is expected to go live by the end of FY24.
The rollout of Country Road Group brands across stores and online will also continue through to FY25.
“Our value proposition is clearly resonating with an improving multi-channel offer, record engagement across MYER one and our highest active customer base translating to a strong comparable sales result and improved market share,” King said.
“Our investment in the store environment through multiple refurbishments, more shop in shop experiences and the roll out of new brand propositions, most notably the Country Road group, has translated into our highest customer satisfaction scores on record.
“Overall, the Customer First Plan positions Myer to leverage the key strengths of our business.
“Like all retailers, we continue to remain cautious about the macro-economic environment, however, we are encouraged with our results for the first six weeks of 2H, and have a strong program of deliverables to roll out during the half as part of our Customer First Plan.”