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Myer Holdings (ASX: MYR) is bracing for a drop in full year net profit of up to 30 per cent in FY24, driven partly by the loss of two flagship stores and the underperformance of its Sass & Bide, Marcs and David Lawrence brands.
The department store group is expecting to post net profit after tax of between $50 million and $54 million for the full year, down from $71.1 million in FY23.
Total sales of $3.26 billion - down 2.9 per cent – reflect the closure of the Myer Brisbane CBD store and Frankston store during the year.
While sales on a same-store basis are up 0.4 per cent for the year, Myer notes that its business has been impacted by weak consumer sentiment and inflationary costs.
In particular, the performances of Sass & Bide, Marcs and David Lawrence, which sit in its Myer Specialty Brands division, have been hit by subdued trading environment and product discounting.
As part of a strategic review of its business, Myer earlier this year revealed it was looking to potentially sell off these three key brands.
However, in an update in June the company revealed that an exit of Sass & Bide, Marcs and David Lawrence was now off the table.
That announcement was accompanied by revelations that Myer had sought to merge Premier Investments’ Apparel Brands business with Myer’s exclusive brands and private label portfolio to create one of Australia’s biggest retail and apparel companies in Australia and New Zealand.
Myers says its strategic review is ongoing and the company is continuing to explore the potential of combining with Premier Investments’ Apparel Brands.
“The second-half sales performance demonstrates resilience in the face of a difficult trading environment for Myer and the wider retail sector, coupled most notably with the closure of our Brisbane CBD store and the underperformance of the Sass & ide, Marcs and David Lawrence brands,” says Myer’s executive chair Olivia Wirth.
“In the current challenging trading conditions, we are acutely focused on optimising operational performance including tightly managing costs, inventory, and margins and fully leveraging our Myer One loyalty program.
“We are also positioning the business for growth and are well progressed in a comprehensive strategic review of the business. We look forward to discussing the strategic review at an investor presentation in October."
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