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Myer Profits Slump 22%, AV Decline

Myer Profits Slump 22%, AV Decline Myer FY2014 sales were flat at $3,1 billion, up 1.2% on a comparable store basis, it said today.  

Net profit also stumbled 22%. There was no lift in final quarter sales either, with revenues flat at $759.4 million. 

The store’s earnings (EBITDA) were down 17% to $252.6m. 

Subdued consumer sentiment following the federal budget and unseasonably warm weather were blamed for the decline. 

Beauty, handbags and Appliances were among the best performers. However, Myer reported lower tablet sales, and a continuing rationalisation of audio-visual offerings as the division continues to suffer. 

Net profit (NPAT) fell 22.6% to $98.5 million, impacted by significant investment to reposition the business, particularly in the store network, omni-channel, and Myer Exclusive Brands, CEO Bernie Brookes said. 

Online sales more than doubled over 38 million visits, representing a 74 % jump on FY13, attributed to better online content, dedicated online distribution centre and the roll-out of ‘Click & Collect’ to all stores. 

Despite the major slump in profits and earnings, Myer Chief Brookes, focused on positive comparable growth which he said was “encouraging” in a challenging year. 

Four of top 25 stores were under refurbishment and there was two store closures.

Myer had a few knockbacks this year, most notably, the rejection of a merger offer it made to David Jones. 

“As expected, our investment in the business during the year adversely affected profitability however we look forward to the benefits beginning to be realised in FY2015.” 

“It was particularly encouraging to achieve comparable store sales growth of 1.2 percent for the year and 2.1 percent in the fourth quarter given subdued consumer sentiment following the federal budget aswell as unseasonably warm weather during the second half.”

We expect continued online sales growth, he said and several exciting new brands including Alex Perry and L Lisa Ho, to drive sale in Fy15. The company also plans to invest $35m-$50m in the business next year. 

 “We look forward to leveraging the valuable insights and experience of our recently strengthened leadership team as we continue to evolve our strategy and deliver improved shareholder value.”  

Myer Exclusive Brands now represent 20% of total sales.