David Jones expects 37% profit increase on 2006

By Martin Vedris

SYDNEY: David Jones Limited today announced it has increased its profit after tax (PAT) forecast for the second half of the year ending 28 July 2007 to between $36.5 million and $37.8 million. This represents growth of approximately 37 to 42 per cent over 2006.

Based on the strong FY07 trading performance and the company’s strong gross profit margins, the underlying FY07 PAT forecast is now between $107.5 million and $108.9 million.

The company’s 4Q07 trading performance to date has been very strong, despite cycling a high 4Q06 base of 5.4 per cent growth.

According to a statement released by the company today, trading throughout 4Q07 clearance (which ended on 15 July 2007) has been outstanding, delivering a 10 per cent ‘like-for-like’ increase on the 4Q06 clearance.

It is anticipated that sales for the fourth quarter (which ends on 28 July 2007) will be approximately eight per cent higher than 4Q06 on a like-for-like basis and approximately 11 per cent higher on a total sales basis if sales from the new Burwood store are included.

David Jones CEO Mark McInnes said, “The key driver for our increased PAT growth guidance has been our Company’s exceptional trading performance throughout the year.

“This has been driven by three major factors: 1. the strong economic environment; 2. our successful ‘Home of Brands’ business model which has been implemented by our experienced and capable management team; and 3. the recent industry restructure which has given rise to unique opportunities that our business has been able to capitalise on.”

McInnes pointed out that in addition to the company’s strong sales performance for the year, each of the fundamental components of David Jones’ business (including Gross Margins, Inventory management and Cost Efficiencies) have been well managed.

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