Release Date: September 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Myer Holdings Ltd (ASX:MYR, Financial) reported a 0.4% increase in group comparable store sales for FY24, showing improvement despite challenging conditions.
- Online sales grew by 2% to $704 million, constituting 21.6% of total sales, with a 9% improvement in profitability.
- Customer satisfaction levels reached a record high of 85%, indicating strong in-store experience improvements.
- The MYER one loyalty program achieved a record year with 4.4 million active members, demonstrating strong customer engagement.
- The company maintained a robust balance sheet with $114 million in net cash, providing a platform for future growth initiatives.
Negative Points
- Total sales for FY24 were down 2.9% compared to FY23, impacted by store closures and challenging macroeconomic conditions.
- Net profit after tax decreased by 26% to $52.6 million, partly due to the underperformance of specialty brands sass & bide, Marcs, and David Lawrence.
- The company faced inflationary pressures, leading to a 1.3% increase in the cost of doing business.
- Shrinkage and stock adjustments remained a significant cost, totaling $46 million for the year.
- The new distribution centers are not yet fully operational, delaying expected benefits from these investments.
Q & A Highlights
Q: How is Myer performing in the current market, especially with different age cohorts?
A: Olivia Wirth, Executive Chairman and CEO, stated that while macroeconomic conditions remain challenging, Myer is well-positioned to capture any market upside. The MYER one program continues to grow, attracting a younger demographic, which is crucial for future sales growth.
Q: What is the strategic rationale behind potentially acquiring Premier's 600 stores?
A: Olivia Wirth explained that despite challenges with specialty brands like sass & bide, the potential acquisition of Premier's stores offers strategic benefits, including scale, diversification, and leveraging the MYER one loyalty program. The aim is to enhance shareholder value and customer proposition.
Q: Do you believe CBD stores will fully recover post-pandemic?
A: Olivia Wirth acknowledged that while CBD stores have not fully recovered, there is confidence in gradual improvement. The focus is on enhancing in-store experiences and leveraging customer satisfaction to drive foot traffic back to these locations.
Q: How do private label and exclusive brands attract younger customers?
A: Olivia Wirth highlighted that private labels play a significant role in appealing to younger demographics, particularly in apparel. The MYER one program provides insights to tailor offerings and attract a broader, fashion-focused customer base.
Q: Can you provide more details on the gross margin differences between own brands, third-party brands, and concessions?
A: Matt Jackman, CFO, explained that own brands have a gross margin in the early 50s percentage, national brands around 40%, and concessions in the early 20s. The focus is on balancing these to optimize customer offerings and profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
