Myer sales plummet in horror start to Christmas
MYER has revealed its sales in the first two weeks of December have collapsed by 5 per cent compared with the same time last year in a shock trading update.
In a statement to the Australian Securities Exchange on Thursday, the struggling retailer blamed reduced foot traffic, widespread industry discounting and subdued consumer sentiment for the continued deterioration in sales.
It comes after the company revealed comparable sales in the three months to the end of October were down 2.1 per cent on the previous year, while comparable sales in November were down 1.8 per cent, despite "investing heavily" in marketing and "traffic-driving initiatives".
"Trading during the past two weeks has been significantly below our expectations and the year-to-date run rate, and while there is an additional weekend of pre-Christmas trading this month, we do not know what the sales impact of that will be," Myer chief executive Richard Umbers said.
"There has been continued strong performance in our online business with sales up 62 per cent in the first four months despite cycling a particularly strong previous corresponding period in the lead-up to Christmas 2016.
"While this strong growth has not been sufficient to offset the subdued trading in some stores, we take confidence from this performance as indicating that we are investing in the right areas."
The company has warned "recent trading environment" is expected to result in a profit shortfall that is unlikely to be recovered in the remainder of the first half of the year.
"A significant proportion of annual profit is generating during the second quarter," Myer said. "Given the recent sales volatility and considering the magnitude of sales expected in the coming weeks, Myer does not have a reasonable basis to provide a specific profit range for the half or full year at this time."
It comes amid a raging battle between the Myer board and major shareholder Solomon Lew, head of retail group Premier Investments, who has been highly critical of the company's poor financial performance and declining share price.
Earlier this week, Citi analysts warned retail sales conditions leading into Christmas were tracking between 2-4 percentage points slower than the same time last year. "The signs are not great because the lead-up has been soft, discounting has been pulled forward and there are few 'must-have' items this year," Citi analyst Craig Woolford said.