The Myer Holdings Ltd (ASX: MYR) share price is catching the eye on Tuesday.
In morning trade, the department store operator's shares are up 13% to 75.5 cents.
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Why is the Myer share price jumping?
Investors have been fighting to get hold of the company's shares this morning after it released a trading update.
According to the release, the company has achieved a marginal increase in comparable sales during the first half. Management believes this demonstrates the strength of the improved customer value proposition under its Customer First Plan.
Particularly given that this has been achieved despite the challenging trading conditions compared to the prior corresponding period when a record sales performance was delivered.
Total sales for the first half of FY 2024 are expected to be down 3% on the prior corresponding period to $1,829.1 million, but 13.8% higher than the same period pre-COVID.
From this, group online sales are expected to be $390.1 million. This will be an increase of 2% and represents 21.3% of total sales.
What about profits?
Myer is guiding to a first half net profit after tax of between $49 million and $53 million. This will be down from $65 million a year earlier, which reflects the unfavourable impacts of store closures and inflationary cost pressures.
Nevertheless, this appears to have been better than feared by the market, hence why the Myer share price is lifting off this morning.
Myer CEO, John King, commented:
To match our best first half sales result on record, on a comparable sales basis, is an encouraging result given the current economic environment. Like many retailers, we have had to contend with inflationary pressures and greater promotional cadence, which has had an impact on profits.
Our focus remains on seeking to drive further and sustainable cost efficiencies and inventory management. We expect the consumer to remain cautious in the second half of FY24 but believe we remain well positioned with the strength of our leading loyalty program, our national distribution centre starting to scale and the continued roll out of successful brand extensions and new additions.
