Myer results better than expected

Luxury Goods

Department store group Myer has upgraded its guidance for second half sales and full year earnings, following a solid third quarter sales performance.

The unlisted company now expects comparable sales for the second half of fiscal 2009 to be down around one per cent from the same period in fiscal 2008. The new forecast is better than its previous guidance for sales to fall by five per cent.

Myer also expects earnings before interest and tax (EBIT) and net profit for the full year to show a mid-to-high single digit increase, as sales fall by around 2.5 per cent. The earnings outlook is better than its previous forecast for a “similar” result to fiscal 2008.

Myer, which will release its results for the year ended July 25 in September, said its improved outlook followed a solid sales performance in the third quarter. “In the context of a challenging economic environment and volatile consumer confidence, we will continue to manage our business cautiously,” CEO Bernie Brookes said in a statement on Wednesday.

“However, given our solid third quarter sales performance and assuming we do not experience any material deterioration in trading conditions during the remainder of the fourth quarter, we anticipate that our full year sales will be down approximately 2.5 per cent.”

Brookes said sales during the company’s mid season sale in April were higher than last year and customers had responded positively to promotional activity. “We have also observed a greater impact from the second federal government stimulus package, particularly in many of our suburban and regional stores,” Brookes said.

He added that cosmetics, womenswear and accessories continue to be the strongest performing categories, while menswear and electronics had improved and traded well in recent weeks.