Analysts from JPMorgan got it horribly wrong yesterday when, according to the morning business media, they forecast Myer would lift topline sales in the September quarter by 3.5% and like for like sales (comparable or same store sales) by a solid 2.1%.
They also forecast sales for the quarter of $715 million. Well, there was a shortfall, sales came in at just over $691 million, topline sales were up 0.1% and like for like sales eked out a rise of 0.7%.
That was a big fail from JPMorgan, and despite Myer (MYR) pointing out that like for like store sales had now risen in nine of the last ten quarters, investors saw it as bad news and sold off the shares.
Myer shares ended down 7.3% at $1.73, and a new 52 week low. The company is losing the trust of the market.
MYR 5Y – Still tough going at Myer
That was after they rose 1.2% on Tuesday as traders, thinking they were clever, bought in ahead of the sales report yesterday.
In a statement to the ASX, Myer chief executive Bernie Brookes said trading had "gathered momentum as the quarter progressed reflecting the recent opening of our Indooroopilly (QLD), Adelaide (SA), and Macquarie (NSW) stores following major refurbishments and the opening of a new store at Mt Gravatt (QLD) in October".
He claimed the retailer was seeing strength in its cosmetics business, toys category, and said ‘Click and Collect’ – the purchase of goods at Myer Online, to be collected at a Myer store – would be popular ahead of Christmas.
“We believe the business is well positioned to make the most of the busiest time of the year during Christmas and the Stocktake sale,” Mr Brookes said.
“We recently unveiled our new brand positioning, ‘find wonderful’, which follows extensive research into the Myer customer base, their desires and aspirations. The research was also used to re-launch the company’s purpose and values to drive employee engagement across the business. There is a major television campaign supporting the re- launch which will be supported by online, cinema, and in-store media.
"During October, Myer Christmas Giftorium was launched in all stores. Giftorium was developed to bring back fun and theatre to Christmas shopping, creating a one-stop destination for all festive gift giving. Giftorium occupies over 37,000 square metres of space across the Myer store network and offers over 2.2 million products showcasing many new and innovative products across all categories including toys, homewares, fashion and cosmetics.
"The rollout of 1,400 iPads in stores with a customised app has been very well received by customers. With this technology customers can now enjoy a significantly expanded product range across the physical store network. Following the rollout of Click and Collect in all stores, the take-up by customers has been gaining momentum during the quarter and it is anticipated that this will continue to be particularly popular in the lead up to Christmas,” Mr Brookes said in yesterday’s statement.
