The Myer Holdings Ltd (ASX: MYR) share price has jumped 15% after the department store business announced an impressive HY23 result, and a big dividend.
Myer operates a number of department stores around the country, while also offering e-commerce capabilities.
Myer’s FY23 half-year result
These are some of the main highlights from the 26 weeks to 28 January 2023:
- Total sales growth of 24.2% to $1.9 billion
- Online sales fell 9.8% to $382.3 million, this was 20.3% of total sales
- Operating gross profit grew 17.4% to $683.2 million
- Cost of doing business (CODB) was 23.5% of total sales, an improvement of 126 basis points (1.26%)
- Net profit after tax (NPAT) rose 101.4% to $65 million
- Net cash on the balance sheet increased $50 million to $267 million
- Interim ordinary dividend of $0.04 per share and special dividend of $0.04 per share
Myer said that this is the best-on-record first half sales performance. The CBD stores saw the strongest year on year growth, with an increase of 53.7%, or 20% when lockdowns were excluded from the comparison. That’s a helpful rebound for the Myer share price.
The business said that its customer loyalty program – MYER One – is underpinning its growth, with 73.5% of transactions going through the loyalty program. Active members increased to 4.1 million in the last 12 months.
Myer noted that partnerships and ‘pay with points’ programs allow greater access to new customers, new revenue streams and provides “greater value for customers and their reward programs.”
The Myer CEO John King said:
Our continued investment in MYER One and our data capability is demonstrating strong growth in all metrics, underpinning the trajectory of our business. Partnerships across Commbank, Virgin and American Express continue to deepen the value offered to customers and in turn will provide greater revenue and growth opportunities for our business.
Trading update
Myer revealed in the eight weeks after Christmas, department store sales are up 16.1% year on year. However, while management said that the company is cautious about the outlook, Mr King said the company is “pleased with the momentum” that it’s generating through its customer first plan, and it has a “strong pipeline” of initiatives still to come.
Final thoughts on the Myer share price
Since the start of the year, Myer has risen over 60%. In the past 12 months it has jumped around 170%. That’s an incredible rise. It has done a great job of turning things around.
I think it deserves to be higher, but I think the high Myer share price now reflects the turnaround. A weaker economy could translate to weaker earnings, so I’d be cautious at this level.
