Myer Holdings Ltd (ASX:MYR) has forecast a five per cent profit fall in the 2011 financial year, as the department store battles against fragile consumer confidence.
The latest full year earnings guidance represents a downgrade from Myer's November forecast, when net profit was tipped to grow by between 5 to 10 per cent.
The company attributes the drop in guidance to a challenging retail environment in the first half of the current financial year, and predicts these conditions are likely to continue.
In the six months to 29 January sales eased 3.5 per cent to $1.73 billion, while like-for-like sales dipped 5.2 per cent.
CEO Bernie Brookes says the increased costs of living, anticipated flood levy and food inflation are expected to put pressure on discretionary spending for the rest of the year.
Also, the retailer has today announced that it has bought a 65 per cent stake in the sass & bide fashion label for $42.25 million.
The acquisition is Myer's first since it listed on the Australian Securities Exchange and will give Myer exclusive rights to distribute the sass & bide brand.
In the year to 31 July 2010, Myer reported a net profit of $67 million.
MYR Price at posting:
$3.30 Sentiment: None Disclosure: Held
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