Christmas, the biggest earning period for retailers, hasn’t come to Myer yet.
The company has warned poor trading conditions are expected to result in a “profit shortfall” that is unlikely to be recovered before the end of the first half.
In a market update, the department store chain says total sales to the end of November were down 2.3% and down 1.8% on a comparable store sales basis.
At the close, Myer shares were down 9.6%% to $0.655. The shares have fallen by more than half over the last 12 months
Myer has been hit by the retail crunch, an increasingly highly competitive market with digital players making inroads into market share and consumer sentiment keeping spending down.
Myer says sales during the first two weeks in December weakened further and were down 5% on the previous corresponding period.
CEO Richard Umbers says trading during the past two weeks has been significantly below expectations.
“While there is an additional weekend of pre-Christmas trading this month, we do not know what the sales impact of that will be,” he says.
“There has been continued strong performance in our online business with sales up 62% in
the first four months despite cycling a particularly strong previous corresponding period in
the lead up to Christmas 2016.
“While this strong growth has not been sufficient to offset the subdued trading in some stores, we take confidence from this performance as indicating that we are investing in the right areas.”
The company warning shareholders at its AGM late last month that the department was still fighting difficult trading conditions.
Outgoing chairman chairman Paul McClintock told shareholders the company has continued to make strong progress across each of the key priorities of the New Myer strategy.
However, the company had been awaiting the results of Christmas trading.
Today Garry Hounsell, the new chairman, says while the last two weeks of trading have been
disappointing, he has no doubt that the commitments made at the recent Myer Strategy Day
to further focus on omni-channel and productivity are the correct priorities.
“I am an impatient person and I am driving the Executive team to unlock value more quickly,” he sys.
“During the next 12 weeks, I will be continuing my incoming chairman’s review of all aspects of the business including MYER one, omni-channel, merchandise, marketing, customer service, property and a cost review to commence immediately.
“I will update shareholders on any additional steps that are required to drive performance progressively during this period.
“Everyone at Myer remains resolutely focused on taking appropriate steps to ensure the business can maximise the performance during Christmas and Stocktake Sale.”
On top of Myers trading woes, billionaire Solomon Lew is pushing for change at the company.
Lew’s Premier Investments has 10.8% of Myer.