The Myer Holdings Ltd (ASX: MYR) share price has been amongst the best performers in morning trade.
At the time of writing the department store operator's shares are up 3.5% to 74.7 cents following the release of its full-year results.
Here are key takeaways from today's release:
- Full-year sales fell 1.4% to $3,201.9 million.
- Fourth-quarter and full-year comparable store sales down 0.2%.
- Cost of doing business margin improved by 54 basis points to 31.85%.
- Full-year net profit after tax (pre implementation costs and individually significant items) down 2.2% to $67.9 million.
- Implementation costs of $13.9 million and individually significant items of $42.1 million (post-tax).
- Earnings per share of 8.3 cents.
- Final fully franked dividend of 2 cents per share, bringing its full-year dividend to 5 cents per share.
- Outlook: Sales in the first six weeks of FY 2018 are below expectations.
As I mentioned earlier this week, Citi expected Myer to report a 3.6% decline in fourth-quarter comparable store sales and core net profit after tax of $67 million.
The department store operator has outperformed Citi's expectations in both regards with a 0.2% decline in fourth-quarter comparable store sales and net profit after tax of $67.9 million.
In light of this, I can't say I'm overly surprised to see its shares heading in the right direction today.
However, before investors get too excited I think it is worth noting that the first six weeks of FY 2018 are below management's expectations.
If things do not improve quickly, there's every chance that Myer could be set to have a bitterly disappointing Christmas and New Year period.
As with any retailer, this is the time of year you need to be at the top of your gain. My concern is that if it failures to deliver on expectations during the lucrative period, Myer could see a big drop in sales in FY 2018.
Whilst management is working hard to improve the situation and is focusing heavily on its omni-channel approach, I would suggest investors hold off an investment until there are signs of improvement, despite how cheap its shares look.
As I said previously, I would rather focus on quality retail shares such as Noni B Limited (ASX: NBL) and Premier Investments Limited (ASX: PMV) at this point.
