Myer roars back with $46m profit as online sales continue to surge

Department store group Myer Holdings has defied ongoing business disruptions caused by lockdowns to bounce back into full-year profit for FY21, buoyed by further growth in online sales.

The company announced a bottom-line profit of $46.4 million, turning around a $172.4 million loss from the previous year.

While the FY20 result was impacted by $159 million in one-off impairments and costs, the strength of the latest year’s result is reflected in the 27.7 per cent increase in EBITDA to $390 million.

“This result is a testament to the hard work of our team, and we are starting to see the business thrive despite the extraordinary market conditions,” says Myer’s CEO John King.

“Our significantly improved FY21 results, including growth in profitability for both the first and second half, demonstrates the Customer First Plan is getting real traction.”

The Customer First Plan has been a key platform introduced by King to turn around the group’s flagging fortunes since he was appointed to the CEO role in 2018.

“Customer service is critical, and our store team members have delivered outstanding service in challenging circumstances,” says King.

“This performance is best captured in record customer satisfaction scores with an 83 per cent average customer satisfaction score during FY21. These changes are clearly resonating with our customer with growth delivered across all key metrics for our ever-important Myer One base and further industry recognition in the latest Roy Morgan Most Trusted Brands Index, with Myer moving to number seven, the biggest mover in the top 10.”

Myer grew sales 5.5 per cent to $2.65 billion during the year, with the pace of sales increasing by 8.4 per cent in the second half. The company’s EBIT of $61.5 million in the second half and NPAT of $8.8 million marks the first profit for the group in the second half since FY17.

“Despite the on-again off-again nature of physical retail over FY21, when combined with continued growth in the online business, we delivered solid sales growth when not impacted by lockdowns, particularly in 2H21,” says King.

Online sales over FY21 grew five times as fast as total group sales, surging 27.7 per cent to $539.5 million. Online now represents 20.3 per cent of Myer’s group sales, up from 17 per cent in FY20.

“The sustained profitable growth in our online channel again demonstrated the benefit of our multi-channel approach to market,” says King.

“There was significant growth achieved during 1H FY21, in particular during the Black Friday four-day sale period in the lead-up to peak Christmas trade.

“As we have consistently said over the past three years, our focus has been on profitable sales, growing the online business, disciplined management of costs, cash, and inventory, space optimisation and the deleveraging of our balance sheet. The successful execution of these, and many more strategic initiatives, has delivered solid growth across all our key metrics in FY21.”

Myer continues to suspend dividend payments due to ongoing uncertainty around the current lockdowns in NSW, Victoria and ACT.

Shares in MYR are up 6.86 per cent to $0.54 per share at 10.51am AEST.