Myer reports strong online sales growth in Covid’s wake
A “particularly strong” run-up to Christmas saw department-store chain Myer achieve solid sales growth in the five months to January 1, despite the company losing 27 per cent of its brick-and-mortar store trading days due to Covid-related trading restrictions.
In a trading update released on the eve of the Australia Day public holiday, Myer reported sales growth of 12.3 per cent year on year, and a 17.1-per-cent boost in the two months to the end of December, which were not impacted by lockdowns.
“While we are seeing Omicron impact sales post Christmas, we will continue to focus on growing our strong online business, ongoing engagement across our Myer One program and disciplined management of costs and inventory,” CEO John King said in a statement.
“The results demonstrate the continued momentum of our Customer First Plan and the resilience of the business to overcome the initial months of lockdowns and still record significant sales growth during this period.”
Myer’s momentum in online sales growth remained strong, with group online sales 54.3-per-cent higher than in the same period a year earlier. Online sales now account for 27.7 per cent of group turnover, up from 20.2 per cent the prior year.
However, the company warned that while operating gross profit had improved, other factors were likely to impact on final profit. While sales were up for the five months, the cost of sales had increased as well – particularly with the absence of government JobKeeper support. And since January 1, the advent of Omicron has negatively impacted trading.
“Myer’s strong online channel continues to provide customers choice in times of uncertainty and management’s focus on inventory, cash and the balance sheet will position the company well to manage this phase of the pandemic,” the statement concluded. Interim results for the period to January 29 will be released in early March.