Myer updates profit guidance, no thanks to CE business

By Keri Algar

SYDNEY, NSW: For the six months to 29 January 2011 Myer sales were down 3.54 per cent compared to the prior corresponding period and on a like for like basis sales were down 5.19 per cent causing the readjustment of the super store’s profit guidance for 2011, according to a statement issued this morning on the Australian Securities Exchange.

Myer CEO Bernie Brookes said that the last half year’s trade had been impacted by “ongoing fragile consumer confidence and a highly competitive retail environment with widespread discounting”.

“Sales across many categories were impacted by price deflation as a result of increased discounting, as well as the strong Australian dollar, which made purchasing overseas more attractive,” said Brookes in a statement.

The electrical business was impacted by ongoing price deflation in important product lines such as TVs, as well as bad sales in consoles and games. Myer also said that store sales during the first half were impacted by the decision to exit the whitegoods category to better use the space to move the music business from concession to wholesale.

The company said that given the unpredictable nature of the current trading environment a further update would be issued alongside its first half year results on 17 March 2011.

Despite the disappointing results Myer said it was making “good progress” in certain areas such as the refurbishment of key stores and the performance of new stores, a new look website, the roll out of a new point of sales system and the development of offshore global sourcing offices including a new internet site based in Hong Kong.

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