Myer share price rockets 17% on doubled profits and special dividend

Who dares say that department stores are dead?

| More on:
woman looking around and watching department store, such as Myer

Image source: Getty Images

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

Key points

  • Myer shares are rocketing higher on Thursday
  • This follows the release of the department store operator's half-year results
  • Myer doubled its profits and declared an interim and special dividend

The Myer Holdings Ltd (ASX: MYR) share price is shooting higher on Thursday morning.

At the time of writing, the department store operator's shares are up 17% to a 52-week high of $1.12.

This follows the release of the company's half-year results.

Myer share price jumps after profits double

  • Total sales up 24.2% over the prior corresponding period to $1,884.9 million
  • Gross profit up 17.4% to $683.2 million
  • Cost of doing business (CODB) reduced to 23.5% of total sales
  • Net profit after tax increased 101.4% to $65 million
  • Fully franked interim dividend of 4 cents per share
  • Special dividend of 4 cents per share

What happened during the half?

For the six months ended 28 January, Myer reported a 24.2% increase in total sales to $1,884.9 million. This reflects strong in-store sales growth, which offset a pullback in online sales.

And while Myer's gross profit margin softened due to the unfavourable impact of higher shrinkage and foreign exchange movements, its CODB improved meaningfully and supported strong net profit growth.

Myer reported a 101.4% increase in net profit after tax to $65 million. This led to its cash balance lifting by $50 million to $267 million and allowed the Myer board to reward shareholders with both an interim dividend and special dividend of 4 cents per share each.

Management commentary

Myer's CEO, John King, was rightfully pleased with the strong result. He said:

We are very pleased with the strength and quality of our first half results, with a best-on-record first half sales performance, significantly improved profitability and a balance sheet that continues to provide a strong foundation for future growth. The result reaffirms our view that the Customer First Plan is the right strategy, which continues to deliver strong outcomes for our business and shareholders.

Our omni-channel offer is strong, we continue to invest in MYER one, one of the country's most effective retail loyalty programs and have also demonstrated our ability to capitalise on customers returning to stores and CBD locations through a targeted program of store space optimisation, a stronger merchandise offer, key refurbishments and improved customer service.

Commenting on the dividends and current trading, King added:

Our ordinary fully franked dividend and additional special dividend demonstrates the confidence in the momentum being built as we move through FY23, with Department store sales growth in the eight weeks post Christmas up 16.1% over the corresponding period in the prior year; continuing to deliver sales momentum despite tightening economic conditions.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

Happy friends at a party enjoying pizza, symbolising the Domino's share price.
Broker Notes

Buy, hold, or sell Domino's Pizza shares after shock CEO exit? Here's what the experts say

The Domino's share price has been recovering after losing a quarter of its value last Wednesday.

Read more »

Photo of a happy couple with their car and car keys.
Consumer Staples & Discretionary Shares

What are Macquarie's top ASX All Ords picks in the automotive sector?

Aussie investors are becoming increasingly interested in auto stocks.

Read more »

basket of grocery items with smart phone ordering system
Consumer Staples & Discretionary Shares

Here's how Aldi plans to disrupt Coles and Woolworths with online shopping

Here’s Aldi’s latest move to try to win market share.

Read more »

Two male professional analysts discuss share price movements shown on the computer screen in front of them, with one pointing to a screen
Consumer Staples & Discretionary Shares

Broker tips 40-52% upside for these ASX consumer staples shares

This broker is tipping a big year ahead for these ASX shares.

Read more »

Happy couple doing online shopping.
Consumer Staples & Discretionary Shares

Consumer dicretionary picks: what's Macquarie's price targets for Nick Scali and Harvey Norman shares?

This broker has a clear favourite.

Read more »

Woman presenting financial report on large screen in conference room.
Consumer Staples & Discretionary Shares

Why this consumer share is up 10% on earnings guidance

This company’s shareholders have seen their holdings gain 46% in a year.

Read more »

A man and a woman line up to race through a supermarket,.
Consumer Staples & Discretionary Shares

Supermarket battle: Does Macquarie see more upside for Woolworths or Coles shares?

Which stock should investors put in their shopping basket?

Read more »

Happy couple doing online shopping.
Consumer Staples & Discretionary Shares

Furniture battle: Does Macquarie prefer Nick Scali or Temple & Webster shares?

Let's see which one the broker is recommending to clients.

Read more »