Myer unveils profit upgrade

Department store chain Myer has shrugged off the effects of the downturn to announce that it now expects comparable sales for the second half of fiscal 2009 to be down around 1%, after previously forecasting that sales could fall by 5% in the second half.

As a result, Myer is now expecting earning before interest and tax will grow by “mid to high single digits” despite sales falling by around 2.5% over the full year.

“In the context of a challenging economic environment and volatile consumer confidence, we will continue to manage our business cautiously,” chief executive Bernie Brookes said in a statement.

“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 says shoppers have responded well to Myer’s mid-season promotional campaign and the chain has also received a boost from the Federal Government’s stimulus packages.

“Cosmetics, womenswear and accessories continue to be the strongest performing categories, while menswear and electronics have improved and traded well in recent weeks.”

Myer is owned by a consortium led by private equity group TPG and members of the Myer family. It has been extremely successful at turning its business around, despite the onset of the downturn, using a mix of cost reduction, improved supply chain management and increased investment IT.

For more on the company’s downturn-busting strategies, click here.