After Woolies, David Jones is the ‘glamour’ retailer these days, thanks to things like its glitzy Sydney winter fashion launch on Tuesday night and the quality of its sales and earnings in the past year.
Investors certainly treating it like a star, the shares hit another intraday high of $4.94, within sight of $5, a level you would have thought impossible a year or so ago.
The shares closed steady at $4.80, equal to the previous all time high.
The problems at Myer and then its sale to private equity and repositioning slightly down market of DJs has helped in the market place. Good management, solid stores, refurbishments and a performing financial services business, has added to the lustre.
Yesterday’s price rise came after the retailer said first half-year sales have topped the $1 billion mark for the first time, after strong trading at Christmas and at the following clearance sale.
David Jones said sales rose 7.8 per cent to $1.04 billion for the first half, with sales in the second quarter growing by 8.9 per cent to $607.3 million. (The strong upturn in the second quarter was signalled in a guidance statement to the market last month).
CEO, Mark McInnes said in a statement announcing the sales figures that the company was pleased with the sales growth which reflected a strong trading environment over the past three months.
“We are delighted with our strong sales performance in 2Q07 (second quarter fiscal 2007), in particular throughout the critical Christmas and clearance trading periods,” he said.
“This is the first time in our company’s history that we have reported more than $1 billion of sales revenue in a six-month trading period.”
“Our trading result reflects a general strengthening in consumer sentiment over this period and the fact that our business was well prepared to leverage this,” Mr McInnes said.
“It also reflects strong customer response to David Jones’ differentiated brand offerings in an environment where the competitive dynamics in the department story industry are changing.”
DJS said sales in all categories had exceeded expectations with womenswear, menswear, accessories, footwear and cosmetics the stand-out performers.
Homewares and entertainments, including ipods, also performed well, with the furniture business showing steady improvements.
That mix is a little different to reports coming from broader retail sectors where products such as electronics goods of all sizes and types are doing well, but furniture and products linked to homes and home renovations and new homes, are doing it tough.
Mr McInnes said DJs was pleased with the performance of its stores in all States.
Booming Western Australia “delivered exceptional growth throughout 2Q07, followed closely by Victoria and Queensland, with NSW, South Australia and the ACT also delivering strong trading performances,” Mr McInnes said.
The Company reiterated the guidance it gave on 16 January 2007 of zero to one per cent growth in same store sales in the current six months because it is coming off the strong second half period David Jones experienced in 2006 when sales rose by well over four per cent.
DJ’s repeated it’s Guidance for underlying Profit after Tax (PAT) the current half: it is expecting it to rise by of 8.5per cent 13.5 per cent and reaffirmed its previous Guidance of 5 per cent-10 per cent growth in the 2008 year compared to 2007.
