Myer reported improving sales for the latest quarter as it brings in new senior executives to help turn around the troubled department store.
The retailer posted a 2.1% rise in third quarter sales to $675.5 million, beating analyst expectations of about 1.5%.
The comparable store numbers for the 13 weeks to April show a 3.4% rise. Year-to-date total sales were 1.9% higher to $2.47 billion, up 3.3% on a comparable store basis.
Myer shares were up more than 6% to $1.20 in early trade.
And the department store is making the most of its properties, reporting 5.1% higher sales per square metre for the quarter.
Myer is running behind main competitor David Jones, now owned by South African company Woolworths Holdings. Expansion of private label brands helped David Jones increase sales by 11.2% for the half year to December.
But the latest quarterly results build on Myer’s half year sales, a 1.8% rise to $1.79 billion, or 3.3% on comparable store sales basis.
However, Myer says sales have been subdued at the start of winter clothing season because of recent warm weather.
And the retailer says the federal election campaign will have an impact on consumer sentiment but this is difficult to quantify.
“These results build on our first half performance,” says CEO Richard Umbers, releasing the third quarter sales.
“We believe they further demonstrate that New Myer is moving in the right direction and that our customers are responding well to the New Myer strategy.”
Umbers also announced the appointment of Daniel Bracken as Chief Merchandise and Customer Officer, and Deputy CEO. He will take on additional responsibility for all aspects of the New Myer customer program.
Bracken is a former CEO of the Apparel Group which operates the Sportscraft, Saba and Jag brands.
Michael Scott, with more than 15 years of experience in marketing and brand management, has been appointed to the new role of Executive General Manager Brand and Marketing.
Scott has worked with Virgin Australia, McDonald’s, Coles Myer, Nike and, through his own consulting agency, Cycling Australia, Publicis Mojo and Subaru.
The New Myer
Myer’s new strategy includes $480 million in capital investment and a target of greater than 3% improvement a year in sales between next year and 2020. The current financial year is a transitional one, carrying costs of the strategy.
The store continues to expect net profit for 2016 to be between $66 million and $72 million excluding the impact of implementation costs associated with New Myer.
The company expects pre-tax implementation costs associated with New Myer to be between $20 million and $30 million.
“The entire Myer team remains strongly focused on delivering our strategic priorities,” says Umbers.
“The momentum in the execution of New Myer is continuing with the rollout of a significant number of new and expanded wanted brands and refurbished brand destinations as well as further improvements to customer service.
“It is increasingly clear that the New Myer’s customer-focused strategy combined with brand and service initiatives are translating into improved performance so it is critical that we now take further steps to build on this early momentum.”