Richard Umbers, the CEO of Myer, says retailing in Australia is in the worst shape he has seen for years.
“It is really tough out there,” he told The Australian newspaper.
He was speaking after the department store chain today posted a 3.3% third quarter drop in headline sales to $653 million and 2% fall on a comparable store basis.
Umbers said the sales reflected challenging trading conditions compounded by severe weather 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.
“This has been a very sustained period of subdued consumer spending and subdued, or patchy, consumer sentiment as well, and those two things together mean that retail has been suffering,” he told The Australian.
The most recent quarterly sales numbers are a deterioration from March when the company reported sales down 0.5% for the half year.
However, 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.
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 has been restructuring the business as part of a five-year plan.
“We have remained strongly focused on driving productivity, lifting efficiency and reducing our historic dependency on discounting all of which have impacted the result,” said Umbers in his quarterly update.