Myer Posts $476M Record Loss, Biggest In Company History
Following a recent CEO departure and several profit downgrades, Myer has posted a record $476.22 million half-year loss – it’s biggest in over a hundred years of trading.
Considered Australia’s largest department store, Myer’s brand value has also been significantly hit, following a whopping $524.5 million wipe-out of its goodwill.
The news comes after Myer was recently dumped from the ASX 200.
Total sales for the half-year slipped 3.6%, with revenue notching $1.71 billion. A net loss before impairments of $40.1 million came in close to the guidance provided in February.
Back in February, Myer issued a profit downgrade, and affirms performance has worsened since Christmas.
For the half year, like-for-like sales slipped 3%.
The retailer affirms online sales have continued to be a “standout result”, soaring 48.9% year-on-year.
Tough retail conditions and notable restructuring costs further drove Myer’s half-year results into the red.
The retailer notched $6.5 million in redundancy and restructuring costs, plus $7.24 million in store exist costs.
Back in 2015, Myer announced its ‘New Myer’ turnaround strategy, which pledged to invest $600 million to lift sluggish sales and profits.
As per today’s earnings results, it’s clear the strategy has failed to bear fruit.
The disastrous results will likely further outrage Myer shareholder Solomon Lew, who through his listed conglomerate, Premier Investments, holds a 10.8% in the retailer.
Lew has been vocal about his desire to overhaul Myer’s board.
Earlier this year, Myer announced the departure of CEO, Richard Umbers, which many commentators speculate was a forced termination. Umbers’ duties were taken on by Executive Chairman Garry Hounsell.
Following the disappointing results, Myer has decided to forgo paying a shareholder dividend.
Company leadership is also set to feel some pain, following cuts to Director and Chairman fees.