Department store Myer was pleased to announce its first quarter sales for FY17 rose 0.6 percent to $719.2 million, in its AGM meeting this morning.
It looks like new CEO Richard Umber’s strategy turnaround is paying off for Myer, with 2.9 percent sales growth for FY16, announced in its annual AGM address this morning.
After 12 months of significant changes across the business, Myer reported an underlying net profit after tax of $69.3 million dollars, which was in line with expectations and the guidance we gave as part of our capital raising.
Full year sales grew by 2.9 percent to $3.29 billion, or 3 percent on a comparable stores basis, in line with its five-year plan, which was announced in September last year. Myer says its pleased to restore the final dividend of 3.0 cents per share fully franked.
One of Myer’s main strategies in its five-year plan was to focus heavily on delivering market-leading omnichannel capabilities.
The company has been busy working on strengthening its online position in the e-Commerce landscape, improving consumers’ omnichannel experience and refining its infrastructure and operations as well.
Myer attributes its significant omnichannel sales growth to: customer experience improvements driving increased conversion, sales via 2,500 in-store iPads which have increased by 117 percent, and the launch of the Myer eBay store.
Click and collect now represents 9 percent of omnichannel sales and productivity improvements in order fulfillment have reduced omnichannel cost of delivery by 25 percent.
The company boasts over 60 million monthly visits to its online store. To broaden its range online and enable range extension, Myer has recently launched several new concessions online, including Sunglass Hut, Review, Alan Pinkus, Rodd & Gunn.
The retail giant reports its improved pathway to purchase experience led to a 33 percent improvement in conversion rates, which it attributes to new offerings like online redemption of gift cards, as well as increasing its search engine marketing to drive traffic to its website.
Customer service improvements was another major area that Myer has honed in on in the last 12 months, delivering a sharper and more valuable service to shoppers.
In its AGM Chairman address this morning, Paul McClintock said:
“The changes we have made under our four strategic priorities – to our merchandise range, our service levels, our omnichannel business, and our store network are all consistent with our strategy.”
The company has introduced over 850 new or upgraded wanted brand destinations including Seed, Mimco, TOPSHOP TOPMAN, French Connection, Industrie, Jack & Jones, Veronika Maine, and exited 150 brands as well.
Of course the ultimate test of ‘new’ Myer is whether it delivers the financial results over the next four years. Myer is 14 months into its five-year strategy to ramp sales growth to more than three percent a year.
Some of those results will take time to achieve and will be seen more clearly at the back end of the program, but the board continues to hold the view that subject to no significant deterioration in consumer sentiment, 2017 will see EBITDA growth ahead of sales growth and a return to net profit after tax growth both before and after implementation costs.