David Jones is bucking the 2023 slowdown seen at the likes of Harvey Norman and JB Hi-Fi, revealing that sales for the first eight weeks of the calendar year have risen by 13.6 per cent.
This follows an incredible first-half of FY23 which saw operating profits more than triple.
Woolworths Holdings chief executive Roy Bagattini, who recently sold the department store, said the strong sales were out-of-step with the market realities.
“What you have seen in this level of resilience or this level buoyancy is somewhat counterintuitive to a lot of the macro-contextual indicators and the news that you see out there, whether it’s house prices, whether it’s record high interest rates or the levels of inflation,” Bagattini said.
“You would expect these impacts to play through into a much more softening of demand or consumer demand, but we haven’t seen that, frankly, in the first period of our second half and obviously we are buoyed by that.”
In January, sales grew just 2.5 per cent at JB Hi Fi stores, and were flat at The Good Guys. Meanwhile, Harvey Norman has seen a sales slide of more than 10 per cent in January.
For the six months to December 31, David Jones experienced a strong period, despite the turmoil going on behind the scenes, as Woolworths Holdings attempted to court a series of potential buyers.
Adjusted operating profit grew by 245.8 per cent to $106.5 million, with an operating profit margin of 8.3 per cent, compared to 3.2 per cent in the prior period.
Turnover and concession sales increased by 31.8 per cent, and by 27.6 per cent on a comparable store basis. The company’s flagship and CBD stores were performing “ahead of expectations” during the half.
Online sales contributed 17.2% of total sales, compared to 28.1% for the prior period.
Gross profit margin improved by 14 per cent to 36.4 per cent.
Sales in the final six weeks of 2022 grew by 2.3 per cent, a trend that is clearly carrying through to the new year.
Bagattini isn’t blind to the possibility of a slowdown later in the year.
“I do think we do still anticipate a level of softening to come through, we obviously look at things like tourism, etc but really that is only starting to come back,” he said.
“But overall we do expect there is a lag impact to some of these things to just start playing through and having a level of impact on consumer demand.”
The sale to Anchorage for around $100 million will be finalised around March 27. It does not include the Bourke Street building.
