Weak sales at Myer have turned into a slide.
The department store blamed “challenging trading conditions” for a third quarter drop of 3.3% in headline sales to $653 million and 2% fall on a comparable store basis.
A short time ago, Myer shares were down 3.2% to $0.98.
The most recent numbers are a deterioration from March when the company reported sales down 0.5% for the half year.
However, CEO Richard Umbers is sticking to full year guidance provided at the first half results when the retailer posted a 5.3% rise in net profit after tax to $62.83 million.
Then he said Myer anticipates EBITDA (earnings before interest, tax, depreciation and amortisation) growth to exceed sales growth in 2017 and increased net profit after tax.
The company faces still competition from traditional and digital players but has been restructuring the business as part of a five year plan.
In the latest quarterly report, Umbers says the sales result reflects challenging trading conditions compounded by severe in Queensland and Northern New South Wales associated with Cyclone Debbie.
Total year-to-date sales for the nine months were down 1.3% to $2.44 billion and down 0.3% on a comparable store basis.
However, sales per square metre on a rolling 12 months basis were up 5.1% compared to July 2015.
Online sales were up 36% for the nine months to March.
“We have remained strongly focused on driving productivity, lifting efficiency and reducing our historic dependency on discounting all of which have impacted the result,” says Umbers.
“Over the past 18 months we have invested heavily in improving our omni-channel offer and it is pleasing to have delivered continued strong growth in online sales of 36% year to date.”
Myer has a target of 3% sales growth between 2016 and 2020.
However, industry analysts forecast a continuing tough retail environment for Australian department stores, with weaker than expected consumer sentiment and the rise of digital players.
Umbers told the company’s AGM in November that he was aiming for a return to profit growth this financial year.