The Myer Holdings Ltd (ASX: MYR) share price is down 6% to 48 cents this week and is flat on this time last year after a brief surge as high as 74 cents just back in April 2019.
For investors Myer shares are firmly in the 'turnaround' category as the department store operator battles to reverse falling profits and sales. For the 26 weeks ended 26 January 2019 it reported total sales down 2.8% to $1.67 billion, which translated into a net profit of $37.28 million on 4.6 cents in earnings per share. Net debt also fell to $57 million over the period.
One of its biggest challenges is the rise of online shopping and Myer did grow its own online and omnichannel sales 18.6% to $151.2 million over the period. However, analysts still claim that its department stores are in need of heavy reinvestment, while its management team talks more about the importance of cost cutting.
The macro-environment in Australia of feeble wages growth and high household leverage is also a powerful headwind.
So while the stock may look cheap on conventional valuation metrics investors need to consider whether it's a value trap or not.
