Myer Holdings Ltd just admitted first quarter sales are down nearly 5%

Yesterday Myer Holdings Ltd (ASX: MYR) was forced to go into a trading halt reportedly at the request of the stock exchange operator the ASX after claims appeared in the Australian Financial Review that the department store operator had suffered a poor sales quarter ending September 30, 2018.

However, late yesterday evening Myer revealed to the ASX that the situation wasn’t quite as bad as the picture painted in the AFR, although it’s evident the group is still facing serious problems due to falling sales across the board.

According to Myer total sales for the first 13 weeks to October 27 actually fell 4.8% or 4.3% on a same store sales basis. Online sales on an adjusted basis grew just 3.6% over the period, despite the strong shift towards online shopping as consumers shop from home more and more.

Myer’s new CEO, John King, said of the result and group’s strategic turnaround plan: “I want to be clear, our focus is on profitability and we will not chase unprofitable sales just to hit our top line sales number”.

The group’s new strategy is effectively to reduce discounting or sales prices in order to protect the critical profit margins, so while this may hurt top line sales it does not necessarily mean profitability will fall according to Myer’s management.

“During the last five years, Myer has announced an NPAT loss (pre implementation costs and individually significant items) in the first quarter. Due to the heightened focus on profitability, NPAT loss (pre implementation costs and individually significant items) for Q1 FY19 showed an improvement on Q1 FY18”.

This suggests that Myer at least saw an improvement on its bottom line over the quarter even if sales took a turn for the worse.

However, Myer is still facing some big problems heading into the vital Christmas shopping period, as competition rises and the stores suffer from under-investment.

The group also still carries a lot of debt and as such looks a high-risk investment even after its heavy share price falls.

Others across the retail sector have also been struggling recently, including Ltd (ASX: KGN), BWX Limited (ASX; BWX) and Reject Shop Ltd (ASX: TRS).

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended ltd and The Reject Shop Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!