The market may be pushing higher this morning but the Myer Holdings Ltd (ASX: MYR) share price won't be benefiting from the improving investor sentiment.
The department store operator's shares have been halted this morning pending the release of an announcement.
Why are Myer's shares halted?
Today's halt appears to be related to a report in the Australian Financial Review.
According to the report, the AFR has got hold of Myer's sales figure for the three months to October 31. If these details are correct, then Myer has had a terrible start to FY 2019.
The report claims that in the first quarter of FY 2019 Myer's total sales are down 5.5%. And whilst this is disappointing, the biggest concern for me is the sudden deterioration in the company's online sales.
Myer's online business has been its shining light over the past couple of years, but that light appears to be dimming. The AFR claims that its online sales have fallen 5.2% on the prior corresponding period.
In response to this report, Myer released a brief statement this morning. It said:
"Myer Holdings Limited refers to the article contained in today's Australian Financial Review commenting on the Company's financial performance. The Company is well aware of its continuous disclosure obligations and confirms it is in compliance with them."
No comments were made on its sales performance, but I expect the halt has been requested whilst a sales update is hurriedly prepared.
What now?
If these sales figures prove accurate then I wouldn't be surprised to see the Myer share price plunge lower, much to the dismay of major shareholders including Premier Investments Limited (ASX: PMV) and WAM Capital Limited (ASX: WAM).
Prior to today Myer's shares were priced at 11x earnings. While this looks dirt cheap, its shares could prove to be a value trap judging by its alleged first quarter performance.
I would suggest investors stay clear of Myer and focus on other cheap retail shares that are still growing at a solid rate such as Adairs Ltd (ASX: ADH) and Super Retail Group Ltd (ASX: SUL).
