MYR please come our with some report

Myer's silence leaves investors in the dark

Sue MitchellSenior reporter

Jul 2, 2020 – 4.44pm

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Myer is under growing pressure to issue a trading update amid increasing uncertainty over sales and earnings during the coronavirus crisis.

While retailers including Kathmandu, Adairs, Accent Group, Nick Scali and Super Retail Group have issued sales updates after reopening stores shuttered in April and May, Myer has not updated investors since its January-half results on March 5.

As a result, the market is in the dark about how Australia's largest department store chain has fared over the past five months.

Myer hasn't issued a sales update since March, leaving investors and analysts in the dark. Dominic Lorrimer

Myer's sales are understood to have fallen by more than 50 per cent in April, when the retailer shuttered stores and stood down 10,000 staff, many of whom were entitled to JobKeeper subsidies.

Myer started reopening stores in May but has given no indication whether it experienced a rebound in bricks-and-mortar sales and has not revealed online sales growth during the lockdown period.

Myer's total sales fell 3.8 per cent to $1.6 billion in the six months ending in January but same-store sales rose 0.4 per cent, after excluding the exit of Apple and the loss of Country Road Group brands.

Online sales rose 25 per cent to $168.2 million in the first half, reaching 10.5 per cent of total sales, and are likely to have accelerated over the past few months, judging by the strong e-commerce growth seen by other retailers such as Adairs, David Jones, Accent Group and Kathmandu.

According to consensus forecasts, analysts still expect Myer to report earnings growth this year, even though sales are forecast to fall 17 per cent to about $2.49 billion and gross margins are likely to take a hit from industry-wide discounting.

Forecasts unclear

Analysts are forecasting earnings before interest and tax of about $105 million compared with $58 million in 2019 and $55 million in 2018, while EBITDA is forecast to rise to $321 million compared with $160 million last year.

However, it is unclear whether these forecasts are adjusted for changes to lease accounting standard AASB 16. Broker CLSA, for example, is forecasting EBITDA of $119 million in 2020 versus $160 million in 2019, while UBS has a $368 million forecast and JP Morgan $332 million.

Myer shares rose 19 per cent on Wednesday, from 18.5¢ to 22¢, and gained another 1¢ on Thursday before closing flat. Last week they traded as high as 31.5¢.

A spokesman said the company was aware of its continuous disclosure obligations but no longer issued quarterly sales updates. He declined to comment on recent reports the retailer was close to finalising refinancing negotiations with its bankers.

All Myer's stores remain open in Victoria, despite the second COVID-19 outbreak in several Melbourne suburbs. Myer's store support centre in Docklands also remains open although most store support staff are working remotely.

Last month Myer cut 90 jobs from head office to cut costs and another 45 people were redeployed to new or redefined roles.