Myer (ASX:MYR) shares in green- what’s next for the retailer?

Highlights

• Myer shares ended the trading session in green on 27 January 2023 at AU$0.97.
• ASX:MYR has grown 46% in January 2023 to-date (as of 27 January 2023).
• Myer expects to register AU$61-AU$66 million in net profit after tax during 1H23.

At market close on 27 January 2023, Myer shares quoted AU$0.97, up by 2.6%. Its market capitalisation stood at AU$776.10 million and the trading volume was over 5.6 million. The shares have grown by over 46% in January 2023 to-date (as of 27 January 2023).

Myer Holdings Limited (ASX:MYR) operates department stores across Australia and also has an online business. The retailer is committed to be “Australia’s favourite department store”.

How has Myer performed in 5 months to December?

During the five months to 31 December 2022, the company witnessed sales growth with total sales gaining 24.8% vs 1H21, 18.9% vs 1H20 and 14.3% vs 1H19. Department store sales jumped 8.7% year-on-year during the six weeks to 24 December 2022.

In its recent trading update, Myer stated that store sales in 1H22 were unfavourably affected by enforced store closures in 1Q22. Additionally, the company reported impact on store sales during Christmas and Stocktake sale in the second quarter, owing to Omicron.

Image source- SHVETS production | Pexels

However, Group online sales were positively affected during these periods- up 39.9% on the corresponding five months in 1H21.

CEO John King highlighted these results as “pleasing”. They are a reflection of “improved profitability” within Myer’s business, he added.

What does Myer expect in 1H?

The company acknowledges that trading from the Stocktake sale period has continued. Consequently, it expects to register AU$61-AU$66 million in net profit after tax during 1H23. The expected figure represents an increase of 89%-104% year-on-year. Also, the figure is up 54%-67% when compared with 1H20 pre-COVID levels.

The company expects to release interim results in March 2023.

Owing to inflationary pressures, interest rate stresses and economic sinusoidal trends, retailers across the globe seem cautious. In such trying times, it will be interesting to witness Myer’s performance and the range of initiatives it is executing.