Myer shares took a pounding, falling to an all time low yesterday of 63.5 cents after it told the market sales had weakened noticeably at the start of the important Christmas season, and as a result first half profit will be weaker than previously forecast.
But the retailer or its management didn’t or wouldn’t put a figure on the lower result.
In a second-quarter trading update released on Thursday, the department store said November trade had been worse than expected, despite heavy investment in marketing and measures to increase foot traffic, and then the start of December had seen a further fall.
The shares fell as much as 7% after the department store operator revealed that sales in the first two weeks of December were down 5% on last year.
Total sales in November were down 2.3% compared with the same period in 2016, and down 1.8% on a same-store basis.
The shares ended down 9.6% at 65.5 cents.
The news will upset Solomon Lew whose Premier Investments spent well over $100 million earlier this year buying a 10% stake in Myer, only to see the share price head south from the average $1.14 paid for the holding.
“Trading during the past two weeks has been significantly below our expectations and the year-to-date run rate,” Myer chief executive Richard Umbers said in the statement filed with the ASX.
“While there is an additional weekend of pre-Christmas trading this month, we do not know what the sales impact of that will be.”
Myer said a significant portion of its annual net profit was generated in the three months to the end of December, and it now expected first-half profit would be materially below last year’s.
But it would not forecast what its first-half or full-year profit would be because of “sales volatility” and the magnitude of sales it expected before Christmas.
Mr Umbers said online sales were up 62% in the first four months of the new financial year but that had not been enough to offset subdued trading in “some stores”.
“We take confidence from this performance as indicating that we are investing in the right areas,” he said.
New Myer chairman, Garry Hounsell, said the past two weeks had been disappointing, but repeated that company’s determination to focus on “omni-channel” retailing and productivity.
