The Myer Holdings Ltd (ASX: MYR) share price is shooting higher on Thursday morning.
At the time of writing, the department store operator's shares are up 17% to a 52-week high of $1.12.
This follows the release of the company's half-year results.
Myer share price jumps after profits double
- Total sales up 24.2% over the prior corresponding period to $1,884.9 million
- Gross profit up 17.4% to $683.2 million
- Cost of doing business (CODB) reduced to 23.5% of total sales
- Net profit after tax increased 101.4% to $65 million
- Fully franked interim dividend of 4 cents per share
- Special dividend of 4 cents per share
What happened during the half?
For the six months ended 28 January, Myer reported a 24.2% increase in total sales to $1,884.9 million. This reflects strong in-store sales growth, which offset a pullback in online sales.
And while Myer's gross profit margin softened due to the unfavourable impact of higher shrinkage and foreign exchange movements, its CODB improved meaningfully and supported strong net profit growth.
Myer reported a 101.4% increase in net profit after tax to $65 million. This led to its cash balance lifting by $50 million to $267 million and allowed the Myer board to reward shareholders with both an interim dividend and special dividend of 4 cents per share each.
Management commentary
Myer's CEO, John King, was rightfully pleased with the strong result. He said:
We are very pleased with the strength and quality of our first half results, with a best-on-record first half sales performance, significantly improved profitability and a balance sheet that continues to provide a strong foundation for future growth. The result reaffirms our view that the Customer First Plan is the right strategy, which continues to deliver strong outcomes for our business and shareholders.
Our omni-channel offer is strong, we continue to invest in MYER one, one of the country's most effective retail loyalty programs and have also demonstrated our ability to capitalise on customers returning to stores and CBD locations through a targeted program of store space optimisation, a stronger merchandise offer, key refurbishments and improved customer service.
Commenting on the dividends and current trading, King added:
Our ordinary fully franked dividend and additional special dividend demonstrates the confidence in the momentum being built as we move through FY23, with Department store sales growth in the eight weeks post Christmas up 16.1% over the corresponding period in the prior year; continuing to deliver sales momentum despite tightening economic conditions.
