Despite Consumer confidence declined by 3.4 percentage points department store Myer has seen a remarkable increase revenue with the business now upgrading its profit forecast.
In a note to the stock exchange Myer has upgraded its profit expectations by 15 per cent to 21 per cent to a range of $69 million and $73 million for financial year 2023.
The department store chain said sales increased 12.5 per cent to $3.4 billion in financial 2023 despite many retailers reporting a fall in sales.
“We continue to tightly manage costs, inventory and cash to ensure we have a strong balance sheet as we begin FY24, where we expect the ongoing uncertainty around the macroeconomic environment to persist,” chief executive John King said.
Myer management warned that second-half sales had ground to a halt, up just 0.4% on a year ago, as customers adjusted to repeated interest rate rises.
Sales in the second half of the year are estimated to be up 11.9 per cent compared to the same period in 2019.
A small second-half profit of between $4 million and $8 million is expected.
Myer’s bottom-line profit for the year ended July 29 is expected to be between $69 million and $73 million, an increase of between 15 per cent and 21 per cent on the previous year, the company said.
Myer shares fell on the news from 71¢ a share on Monday to $0.61 down 14.6% in early trading.
According to an ANZ-Roy Morgan survey consumer confidence continues to wobble with confidence moving into very weak territory – below 80 points – for 23 consecutive weeks, the longest streak on record.
“Homeowners with debt still have far lower confidence than other cohorts, as restrictive interest rates squeeze cashflows of indebted households,” said Adelaide Timbrell, senior economist at ANZ.
Western Australia ended the week with the highest average confidence, while Queensland had the lowest.
Average confidence fell among all the housing cohorts, but the biggest fall was among renters after a jump in the previous week.
