Myer Slumps To $172.4 Million Loss
Iconic Australian retailer, Myer, has slumped to a $172.4 million full year net loss, hit by store closures and the impact of COVID19. It follows a net profit of $24.5 million last year.
Full-year revenue dropped 15.8% to $2.5 billion, with no dividend declared.
The result [post-AASB 16] is dubbed the company’s second largest loss in over a hundred-year history. Back in 2018, Myer reported a $486 million full-year loss, slammed by impairments and write downs.
During the second half, implementation costs and and individually significant items totalled $143.8 million [post-tax], including redundancies and charges related to the Myer One loyalty program.
The results follow a shutdown of most its stores in April and May this year, standing down around 10,000 workers amidst the COVDI19 crisis. Chief Executive, John King, dubbed the move “one of the toughest decisions Myer has faced in its 120 years of operation.”
Net loss after tax [adjusted basis] notched $13.4 million, from a profit of $33.2 million last year.
Online sales soared a whopping 98.8% in the second-half versus last year, with homewares booming 177%.The retailer has continued to accelerate its digital capabilities, with previous investments improving gross profit for the online channel.
Whilst early impacts of COVID19 concerned supply chain matters, social distancing and other lockdown restrictions prompt the temporary closure of all 60 of its physical stores.
The retailer also witnessed significantly lower foot traffic through its physical stores in the second half of the year, especially in city areas.
“Myer’s CBD stores represent some of its largest stores with high associated rents, and staffing requirements and therefore the impact on profit as a result of the reduced revenues was exaggerated,” states Mr King.
The retail conglomerate received $93 million as part of the Australian government’s JobKeeper Payment Scheme, with $41 million paid to team members whose remuneration fell below the required income mark.
Myer forecasts lower CBD foot traffic for the foreseeable future, as it aims to further drive costs down. The retailer has also pledged to further deleverage its balance sheet.