There haven't been many in the last few years, but today is a great day for shareholders of department store operator Myer Holdings Ltd (ASX: MYR).
Following the release of its annual general meeting presentation this morning the retailer's shares have rocketed higher by over 8% to $1.13.
The reason for the excitement is likely to be its first quarter trading update which revealed that same store sales rose 1.6% during the quarter.
Impressively the Australian Financial Review reports that this is the first time it has grown comparable sales at a quicker pace than arch rival David Jones in over two years.
It also means five straight quarters of same-store sales growth, which possibly indicates that Myer's turnaround strategy is in fact working.
Comparable store sales in Flagship and Premium stores increased at a stronger rate of 2.8%. This helped lift total quarterly sales by 0.6% to $719.2 million despite store closures and refurbishments.
For the full year management expects EBITDA growth to exceed its sales growth. Rather positively it also anticipates a return to profit growth.
Whilst I am reasonably bearish on the company, I will happily admit that Myer's transformation so far appears to be working well. The strategy may well result in solid returns for shareholders over the next couple of years, especially considering how cheap its shares are relative to the rest of the market.
But I would suggest investors tread carefully. Whilst I have been impressed with the progress Myer has made with its omni-channel sales, the potential arrival of Amazon on Australian shores is something of a concern.
Retailers such as Myer, JB Hi-Fi Limited (ASX: JBH), and Woolworths Limited (ASX: WOW) could come under significant competitive pressure should the much-speculated Amazon launch occur. For this reason I would avoid these shares.
