The Myer Holdings Ltd (ASX: MYR) share price is down 3% after the department store retailer reported its FY23 result.
Myer Holdings share price
FY23 result
Here are some of the highlights from the 12 months to 29 July 2023:
- Total sales rose 12.5% to $3.36 billion
- Second half sales rose 0.4%
- Operating gross profit grew 6.9% to $690.5 million
- Cost of doing business (CODB) of $824.1 million, being 24.5% of total sales, an improvement of 42 basis points (0.42%)
- Underlying net profit after tax (NPAT) up 18.2% to $71.1 million
- Statutory NPAT of $60.4 million
The statutory profit included implementation costs and ‘individually significant’ items of $10.7 million, consisting of expected closure costs of the Altona and Richlands distribution centres from the ‘factory 2 customer’ (F2C) initiative, and the closure of the Brisbane City store.
CBD stores saw the strongest channel for growth, with sales increasing by 30%, or 14.4% when locked-down periods are excluded from the prior year.
Myer said that sales deteriorated in the fourth quarter of FY23 as economic factors impacted customer demand, which is partly why the Myer share price may be hurting.
Despite the end of COVID-19, the business reported that it made $690.5 million of online sales, being around a fifth of total sales.
Trading update
Myer said that in the first six weeks of FY24, the department store comparable sales were down 1.9% year on year.
The outgoing CEO and managing director John King said:
Like all retailers, we continue to remain cautious about the macroeconomic environment, however, we are pleased with our strong results at the half and the full year, and have a strong program of deliverables to roll out in FY24 as part of our customer first plan.
Myer dividend
Myer’s board decided to declare a fully franked final dividend of $0.01 per share, taking the full year dividend to $0.09 per share, which includes the $0.04 per share interim ordinary dividend and $0.04 per share interim special dividend.
That compares to a $0.04 annual dividend for FY22, so the ordinary dividend was increased by 25%.
The business finished with net cash on its balance sheet of $120 million after its larger dividend payments and investments, with inventory “well controlled at the same level as the prior corresponding period.”
Final thoughts on the Myer share price
Myer has done a great job of turning around demand and profitability, with pleasing dividends.
It’s hard to say what’s going to happen next because of all of the uncertainty about household spending strength. If wealthy customers are able to keep spending, then Myer could be an opportunity at this lower price, but it doesn’t strike me as an incredible opportunity because of the long-term decline of department stores.
