Myer Holdings Ltd just admitted first quarter sales are down nearly 5%

The Myer Holdings Ltd (ASX:MYR) share price is down 30% in 2018.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Yesterday Myer Holdings Ltd (ASX: MYR) was forced to go into a trading halt reportedly at the request of the stock exchange operator the ASX after claims appeared in the Australian Financial Review that the department store operator had suffered a poor sales quarter ending September 30, 2018.

However, late yesterday evening Myer revealed to the ASX that the situation wasn't quite as bad as the picture painted in the AFR, although it's evident the group is still facing serious problems due to falling sales across the board.

According to Myer total sales for the first 13 weeks to October 27 actually fell 4.8% or 4.3% on a same store sales basis. Online sales on an adjusted basis grew just 3.6% over the period, despite the strong shift towards online shopping as consumers shop from home more and more.

Myer's new CEO, John King, said of the result and group's strategic turnaround plan: "I want to be clear, our focus is on profitability and we will not chase unprofitable sales just to hit our top line sales number".

The group's new strategy is effectively to reduce discounting or sales prices in order to protect the critical profit margins, so while this may hurt top line sales it does not necessarily mean profitability will fall according to Myer's management.

"During the last five years, Myer has announced an NPAT loss (pre implementation costs and individually significant items) in the first quarter. Due to the heightened focus on profitability, NPAT loss (pre implementation costs and individually significant items) for Q1 FY19 showed an improvement on Q1 FY18".

This suggests that Myer at least saw an improvement on its bottom line over the quarter even if sales took a turn for the worse.

However, Myer is still facing some big problems heading into the vital Christmas shopping period, as competition rises and the stores suffer from under-investment.

The group also still carries a lot of debt and as such looks a high-risk investment even after its heavy share price falls.

Others across the retail sector have also been struggling recently, including Kogan.com Ltd (ASX: KGN), BWX Limited (ASX; BWX) and Reject Shop Ltd (ASX: TRS).

Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended Kogan.com ltd and The Reject Shop Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Fallers

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Megaport, Pilbara Minerals, Vysarn, and WiseTech shares are falling today

These shares are ending the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

A smartly-dressed man screams to the sky in a trendy office.
Share Fallers

Why Appen, DroneShield, PWR, and Webjet shares are sinking today

These shares are having a tough time on hump day. But why?

Read more »

a car driver sits up and looks alert with wide eyes and an expression of concentration while he holds the wheel of a car.
Share Fallers

Why this ASX All Ordinaries stock just crashed 24%!

Investors are punishing the ASX All Ords company today. Let’s find out why.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Elders, KMD, Lovisa, and Telix shares are dropping today

These shares are missing out on the good times on Tuesday. But why?

Read more »

A woman with short brown hair and wearing a yellow top looks at the camera with a puzzled and shocked look on her face as the Westpac share price goes down for no reason today
Share Fallers

Why Life360, Lovisa, NAB, and Resolute shares are falling today

These shares are starting the week in the red. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Healthcare Shares

This ASX All Ords share is diving 18% as inflation pain draws blood

This healthcare company delivered a trading update at its annual general meeting today.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

Why Healius, Opthea, Peninsula Energy, and Wildcat shares are falling today

These shares are having a tough finish to the week. But why?

Read more »