)
Department store group Myer Holdings (ASX: MYR) has delivered a modest 1.9 per cent lift in total sales so far in the second half of FY25, as online growth offset continued cost pressures, softer performance at its newly acquired Apparel Brands division, and ongoing challenges at its National Distribution Centre (NDC).
In a trading update covering the 16 weeks to mid-May, Myer reported total group sales of $837.2 million, with comparable store sales up 1.5 per cent and online sales jumping 9 per cent, now representing 21.4 per cent of total turnover.
By contrast, Apparel Brands – which includes Just Jeans, Portmans and other fashion retailers acquired in the quasi-merger with Premier Investments – recorded a 3.9 per cent drop in total sales to $211.2 million, with comparable and online sales also down 3.7 and 3.5 per cent respectively.
While topline figures show modest growth, the group flagged that its financial performance continues to be impacted by heightened promotional activity across the sector, inflationary pressures on store wages and occupancy costs, and delays in realising efficiencies from its robot logistics centre in Ravenhall, Victoria.
As highlighted in its half-year results released in March, the NDC has been a persistent operational bottleneck since its launch in August 2024, resulting in inventory delays, dual site costs, and a $12 million drag on 1H25 earnings. The group now says remediation efforts remain ongoing, but a temporary fix has been implemented ahead of the next peak trading period.
This includes enlisting Toll Group as a third-party logistics partner from June 2025, with the capacity to handle up to 40 per cent of peak online volumes, and improved NDC throughput now covering 10 - 15 per cent of online fulfilment.
Myer Group executive chair Olivia Wirth said the business is maintaining momentum in a challenging retail landscape.
“Despite challenging trading conditions that were compounded by a subdued retail environment in the lead-up to the May federal election, Myer has reported growth in its year-to-date sales,” Wirth said.
“This was driven by our strong MYER one loyalty program, which has a record 4.6 million active members and a 79 per cent tag rate, as well as our strong online performance and our diverse mix of categories.”
She also noted economic pressures have made consumers more cautious as they focus on value in response to cost-of-living pressures. However, the company is moving forward with “key transformation initiatives” to manage the sector’s challenges.
“We are embedding Apparel Brands into the Myer Group, strengthening our balance sheet by successfully refinancing, commenced a restructure of sass & bide, Marcs and David Lawrence and have implemented an interim solution for the next peak trading period to address the challenges we faced at our new National Distribution Centre in 1H25,” Wirth said.
Despite a tough first half – where statutory net profit dropped 40 per cent to $30.4 million – Myer continues to highlight the strength of its customer engagement metrics. It's MYER one loyalty program reached 4.6 million active members earlier this year, while in-store customer satisfaction rose to a record 85 per cent.
With the addition of new leadership, including former Super Retail Group supply chain executive Darren Wedding as Chief Supply Chain Officer and ex-Cotton On employee Mark Medwell and Chief Information Officer, the company is aiming to stabilise operations and unlock long-term gains.
Annual EBIT benefits of $10 million from the apparel restructuring and up to $10 million from the NDC are anticipated, though full realisation is expected from FY26.
Shares in MYR are up 5 per cent to 78 cents each at 11:50am AEST.
)
