Shares of department store giant Myer Holdings Ltd (ASX: MYR) have declined by 8 cents or 4.2% today with the stock now trading at just $1.82.
The fall comes after the retailer reported just 0.1% growth in sales for its first quarter operations compared to the previous corresponding period, falling short of what most analysts had been expecting – particularly given the opening of a number of new and refurbished stores. In fact, according to Business Spectator, analysts at JP Morgan were expecting a much more respectable increase of 3.5%.
Comparable store sales also came in under expectations. While JP Morgan had been anticipating growth of 2.1%, same store sales rose just 0.7% for the quarter.
Despite the relatively weak result, Myer's CEO Bernie Brookes expressed his optimism for the company heading into the ever-important Christmas period while he also said the company had delivered sold growth in online sales over the 13 weeks. He also said he was very happy with the cosmetics business which has now delivered 10 consecutive quarters of growth.
Should you buy?
The Australian retail sector has clearly struggled in recent years as a result of volatile consumer confidence as well as the rapid growth of online shopping. Myer has particularly struggled with this trend with sales now having remained relatively flat over the last four years or so.
Investors wanting exposure to the retail sector may be better off looking at companies like JB Hi-Fi Limited (ASX: JBH) or even Super Retail Group Ltd (ASX: SUL), which both look more promising – plus, they both offer a very nice dividend yield.
