The Myer Holdings Ltd (ASX: MYR) share price has sunk 27% after the business reported its FY25 result, which disappointed.
Myer is a department store retailer and it also recently acquired a number of brands including Just Jeans, Jay Jays, Dotti, Portmans and Jacqui E.
Myer FY25 result
Here are the highlights for the 52 weeks to 26 July 2025, which includes the apparel brands:
- Total sales (underlying) increased 0.5% to $3.67 billion
- Operating gross profit of $1.4 billion
- Cost of doing business was $1.02 billion
- EBIT down 13.8% to $140.3 million
- Underlying net profit down 30% to $36.8 million
- Statutory net loss of $211.2 million, down $254.7 million
- No dividend
Myer said that sales proved resilient, though profitability was impacted by a number of factors, including soft economic conditions, reflected in subdued consumer demand and increasing promotional activity.
The company said the apparel brands integration is progressing well, with the group targeting $30 million of annualised synergies by FY27.
Costs at the business increased due to a number of factors, including minimum increases, occupancy outgoing costs impacted by inflation and additional ‘people capability’ to execute on its growth strategy.
National distribution centre challenges
The company also noted that its EBIT was impacted by $16 million by the national distribution centre.
Included in that total cost were Myer exclusive brands stock unavailability costing $8 million, dual site costs of $2 million and online fulfillment costs of $6 million.
I think it’s a good thing for the business to pursue an online sales strategy, but those sales need to add to profitability for the business. Otherwise, it’d be better making less sales but generate more profit.
Arrangements with a third-party logistics provider will start in October to support the peak trading period at the end of 2025.
A long-term solution has been developed and approved by the board, with a cost of $32 million and completion targeted for FY27.
Myer is targeting annual benefits from the NDC of $20 million.
Impairment and other significant items
The statutory net profit was impacted by a $213.3 million impairment to the value of the apparel brands on the Myer balance sheet.
This impairment reflects the decline of the Myer share price over the last year (prior to today) and therefore the weakening of the value of the newly-acquired apparel brands, according to Myer.
Myer also attributed another $34.7 million related to other significant items, reflecting a period of significant transition and merger integration.
Outlook for the Myer share price
Myer said interest rate cuts is helping retail demand in some areas of its business, with womenswear and home categories showing particular strength, though Australian and New Zealand spending remains subdued.
In the first seven weeks of FY26, total sales were up 3.1%.
However, the distribution centre challenges are expected to continue impacting performance in HY26 as a result of the remediation support and higher cost of doing business, with those pressures from FY25 continuing in FY26.
It’s targeting the cost of doing business as a percentage of sales for FY26 to be lower than the FY25 second half.
The Myer share price could be a longer-term turnaround idea at this low level, but it could take a while to regain market confidence. It’s not one I’m looking to invest in right now.
