Myer (ASX:MYR) share price jumps 7% on strong FY 2021 results

Myer was very profitable again in FY 2021…

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The Myer Holdings Ltd (ASX: MYR) share price is charging higher following the release of its full year results.

In morning trade, the department store operator’s shares are up 7% to 54.5 cents.

Myer share price higher on profit rebound

  • Total sales increased 5.5% to $2,658.3 million
  • Online sales up 27.7% to $539.5 million
  • Gross profit margin lifted 168 basis points to 39.7%
  • Net profit after tax of $51.7 million, compared to a loss of $13.4 million in FY 2020
  • Dividend remains suspended due to lockdown uncertainty

What happened in FY 2021 for Myer?

For the 53 weeks ended 31 July 2021, Myer reported a 5.5% increase in sales to $2,658.3 million. A key driver of this growth was its online business, which delivered a 27.7% lift in sales to $539.5 million. This means that 20.3% of Myer’s sales are now generated online.

Complementing its solid sales growth was margin expansion, which was underpinned by the success of its Customer First Plan and its focus on profit sales. This led to Myer delivering a net profit after tax of $51.7 million for FY 2021. This is a huge improvement on the $13.4 million loss it recorded a year earlier.

Despite its strong profit rebound, lockdown uncertainty means that its dividend will remain suspended for the time being.

What did management say?

Myer’s Chief Executive Officer and Managing Director, John King, was very pleased with the company’s performance in FY 2021.

He commented: “This result is a testament to the hard work of our team, and we are starting to see the business thrive despite the extraordinary market conditions. Our significantly improved FY21 results, including growth in profitability for both the first and second half, demonstrates the Customer First Plan is getting real traction.”

“Despite the on again off again nature of physical retail over FY21, when combined with continued growth in the online business, we delivered solid sales growth when not impacted by lockdowns, particularly in 2H21,” he added.

Mr King also highlighted that the company’s focus on profitable sales has been key to the retailer’s resurgence.

He explained: “As we have consistently said over the past three years our focus has been on profitable sales, growing the online business, disciplined management of costs, cash, and inventory, space optimisation and the deleveraging of our balance sheet. The successful execution of these, and many more strategic initiatives, has delivered solid growth across all our key metrics in FY21.”

“We continue to improve our merchandise cycle as evidenced by improved margins and stockturn, reduced aged stock and record low levels of clearance inventory,” added King.

Outlook

One thing that could be holding the Myer share price back a touch today is that there was no guidance provided by management. Though, it did provide a bit of colour on current trading.

The company advised: “Trade remains subdued with lockdowns however there is strong performance in Online and our non-lockdown stores which provides optimism once lockdowns ease.”

Management also advised that it was pleased with how it was positioned going into the Christmas trading period.

Mr King commented: “The business is well placed ahead of the upcoming peak trading period and the team are focused on remaining agile in response to the various State-based lockdowns and travel restrictions.”

The Myer share price is now up 82% in 2021.

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