Myer (ASX:MYR) has met its lowered guidance for the 2023-24 financial year as it battled through challenging market conditions and the fallout from high interest rates. However, it has reduced both its final and full-year dividends.
The department store chain announced on Friday that its net profit was $52.6 million, a 26% decrease from $71.1 million the previous year, as sales fell 2.6% to $3.6 billion following store closures in Brisbane and around Melbourne during the year.
Comparable store sales, however, edged up by 0.2%.
In a trading update in early August (after the July 27 balance date), the retailer stated that earnings would be between $50 million and $54 million. It will pay a final dividend of 0.5 cents per share, down from 1.0 cent per share a year ago. This will bring the total dividend for the year to 3.5 cents per share, down from 9 cents per share in 2022-23.
Myer attributed the lower profit and sales to the challenging trading environment, inflation, and the impact of closing one store in Brisbane and two in and around Melbourne.
Executive Chair Olivia Wirth said in a statement on Friday: "Despite the tougher trading conditions, work undertaken by the Myer team in recent years has helped stabilise the business and established a foundation for future growth."
"With a highly engaged customer base, a leading loyalty program, positive comparable department store sales growth, and high levels of trust in the Myer brand, there are significant opportunities for growth," she added.
The group said its strategic review, which began earlier this year, is ongoing. It also confirmed that it has decided to cease the sale of its underperforming brands, Sass & Bide, Marcs, and David Lawrence.
On Friday, the retailer stated it had begun a reset of Sass & Bide, with 10 stores being closed (a process already underway, with four remaining open), and new concession areas being introduced in Myer stores, among other changes.
Myer also revealed that discussions are ongoing with major shareholder Premier Investments regarding a proposed takeover of Premier’s apparel business, including the Just Jeans, Jay Jays, and Portmans brands. If this deal goes ahead, Sass & Bide, Marcs, and David Lawrence will be combined with the Premier chains.
A deal seems likely, with Friday’s statement mentioning due diligence and other pre-purchase activities by Myer and its advisers. One such move was the postponement of its annual investor day, which had been scheduled for next month.
Myer explained: "Given the ongoing Apparel Brands due diligence process, Myer will reschedule the Investor Strategy Session, initially earmarked for October, to enable a more comprehensive briefing on the Strategic Review and initiatives to drive improved performance and profitability."
Myer also noted a cautious start to the new financial year, with comparable sales growing by 0.2%, the same growth rate as the previous financial year ending July 27, which is a small positive.
