- Shares of MYR closed nearly 7% higher on Tuesday, outperforming the ASX 200 index.
- The company reported strong sales despite COVID-19 induced mandatory store closures.
- The company reported a growth of 12.3% in its total sales during the five months ended 1 Jan 2022.
Myer Holdings Limited (ASX:MYR), which operates department store chain, ended sharply higher on the ASX today (January 25), following the announcement of its trading updates for the five months ending 1 January 2022.
Shares of the company closed 6.76% higher at AU$0.40 apiece, outperforming the broader ASX 200 index, which settled 2.49% lower today.
Myer reports strong sales growth despite headwinds
The company reported a growth of 12.3% in its total sales during the five months (1 August 2021-1 Jan 2022). The sales were mainly led by the Christmas season when there was no lockdown.
Online sales of the company increased even further by 54.3% compared to the previous corresponding period. This was 27.7% of total sales, up from 20.2% in the corresponding period of previous year.
The company reported strong sales despite COVID-19-induced mandatory store closures. During the five months, COVID-19 restrictions resulted in a loss of 27% of department store brick-and-mortar trading days compared to 10% in the prior corresponding period.
Because of the Christmas season, its departmental store sales for the two months ended 1 January 2022 jumped 17.1% on an annual basis.
The company said that despite robust sales growth in the reporting period, its operating profit was impacted negatively because of higher operating costs in the absence of JobKeeper support that was received in the prior corresponding period.
Commenting on the performance, Myer’s CEO, John King said:
Established in 1900 by brothers-duo Sidney Myer and Elcon, Myer operates mid-range to upscale department store chain in Australia. At present, the company operates through 60 departmental stores across Australia. They opened their first store in Bendigo in 1900.
Source: © Starfotograf | Megapixl.com
In 2009, the company got listed on the Australian Securities Exchange.
On 29 November 2021, Myer announced a binding agreement with J.P. Morgan and Gordon Brothers, to refinance its existing credit facilities (which were set to expire in November 2022) with a four-year asset based loan funding package that included a secured revolving credit and term loan facility. The new program was supposed to provide Myer with a solid and adaptable foundation to implement Myer's Customer First Plan.
Despite today's jump, Myer shares are still down over 10% in the last one month, underperforming the ASX 200 index, which fell 7.30% in this period. Given the optimistic outlook of the CEO, it is to be seen how the stock performs in the near future.