Australia-based departmental store group, Myer Holdings Limited (ASX: MYR) has released its half-year results for FY 2019. For the half-year period, the company reported a Net profit after tax (NPAT) of $41.3 million which was 3.1% higher than the previous corresponding period. The NPAT was driven by the improved operating gross profit margin and continued disciplined cost management.
Following the release of this news, the share price of the company increased by 10.244% in the intraday trade as on 6 March 2019 (AEST 04:00 PM).
In the first half of 2019, the operating gross profit margin of the company increased by 99 basis points to 38.5% as compared to pcp. The increase in the operating gross profit margin was driven by the renewed focus on Myer Exclusive Brands (MEBs) which grew by 3.7% during the half year period. Prior to Christmas, the company moved various MEBs in 23 stores to enhance visibility. The company supported these brands with improved service levels, which delivered some encouraging results. Operating gross profit (OGP) also benefited from an improved change in sales mix online with an increase in apparel sales.
The company reported total sales of $1,671.4 million in 1H FY19 which was down by 2.8% on pcp. The Sales during Q2 FY19 were down by 1.4% which represented an improvement on the 4.8% decline in the first quarter. The sales result reflects the continued strong growth in online, the enhanced execution of Christmas, more targeted and relevant marketing and improved service and store layouts. The improvement in service was driven by the rollout of the company’s workforce management tool and team member training.
For the half year period, the total online and omnichannel sales were around $151.2 million, up 18.6% on pcp. In Q2 FY 2019, the online and omnichannel sales increased by 28.8% to $97.7 million.
While commenting on the half-year results, the company’s CEO and Managing Director (MD) Mr. John King told that the half-year results result demonstrates the positive customer response to a number of initiatives from the company’s Customer First Plan, particularly during the all-important Christmas and Myer sale periods.
He further informed that there are various Customer First pilots underway across multiple stores to determine the customer response to new brands, preferred store layouts, brand adjacencies and marketing, which will enable the company to roll out these improvements to further stores.
Mr. King also highlighted that the continued strong growth in the online business, which represented the largest store during December. In the next period, the company will continue to improve the online experience, better matching the store range, including concessions, and making further improvements to fulfilment.
During the half year period, the operating cash flow increased by $8 million to $173 million with total net debt down $57 million.
Meanwhile, in the last six months, the share price of the company decreased by 7.87% as on 5 March 2019. MYR’s shares traded at $0.452 with a market capitalization of circa $336.72 million as on 6 March 2019.
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