South African-owned David Jones has reported a notable 39% drop in half-year profit to $36 million, reflecting sluggish discretionary spending and soft Christmas sales.
The news follows the shock resignation of Chief Executive, David Thomas, early this month – the retailer’s fourth CEO in five years.
A week later, two Australian-based board members of parent company Woolworths Holdings, Gail Kelly and Patrick Allaway, offered their resignation despite being re-elected last year.
For the half-year ending December 23, the department store notched a 1% lift in total sales to $1.12 billion, with same-store sales climbing 0.9%.
Sales in the peak two weeks before Christmas significantly slowed, citing a drop in foot traffic, high household debt and falling house prices.
Despite this, sales from new stores and online purchases continued to climb – up 46%.
It offsets a drop in sales from the closure of half David Jones’ flagship Sydney CBD store for a multi-million dollar renovation.
For the half-year, adjusted operating profit slumped 28.8% to $47 million, with operating profit before strategic initiatives down 10.7% to $75 million.
Owned by South African-based Woolworths Holdings, David Jones asserts the revenue slump has spilled into 2019, with sales down over 3%.
Downbeat results are forecast to persist into the year, congruent with restrained consumer spending.
The news contrasts 2.9% sales growth achieved between the new financial year and November 2018.
Last year, parent company Woolworths Holdings announced it was booking a $712 million impairment charge against the carrying value of David Jones.
It comes after Woolworths Holdings acquired the department stores over three years ago for $2.2 billion.
