Myer has released its results for the first half of fiscal 2019, reporting strong online performance and a decline in in-store traffic.
The embattled department store released its first-half results on Wednesday morning, reporting a drop in overall sales by 2.8 percent, as well as a decline in comparable store sales of 2.3 percent. Looking specifically at the second quarter, Myer also recorded a decline in total sales of 1.4 percent, an improvement on quarter one’s decline of 4.8 percent.
Online and omnichannel sales, however, were up by 18.6 percent over the last six months, finishing at $151.2 million for the reportable period. The company’s online branch of its business performed particularly well in the second quarter, with digital transactions increasing by 28.8 percent to $97.7 million. Looking to its omnichannel offerings, Myer says sales conducted via in-store iPads attributed to $16.9 million of its total online/omnichannel revenue for the half.
According to Myer’s CEO and Managing Director, John King, the company’s stronger quarter two performance reflects the continued growth of the department store’s digital offerings and the enhanced execution of its Christmas campaigns.
Citing his customer first plan, King also said that more targeted and relevant marketing collateral, improved store layouts and the rollout of a new workforce management tool and team training process all played a role in the results from the last six months.
“There is a strong focus across the entire business on reducing costs that do not directly benefit the customer or enhance their experience in-store or online. We have put in place a more streamlined and accountable structure in the support office, which is delivering positive results and we have identified numerous other cost-saving opportunities across the business which may be material in future years,” King said in a statement.
“The improved operating gross profit margin and continued disciplined cost management combined to more than offset higher depreciation and interest expense, resulting in an improved 1H2019 NPAT of $41.3 million.
According to the department store’s results statement, the business finished the period in a net cash position of $37 million, with net debt sitting $57 million lower than it was last year, reflecting “the continued focus to deleverage”.
1H2019 Website Performance
The company has attributed its improved online performance in Q2 2019 to the launch of its new website in September 2018 and its enhanced user experience, especially across mobile devices. Over the Black Friday and Cyber Monday weekend, Myer says its digital sales platform successfully leveraged increasing consumer interest in online shopping events. Orders were reportedly up by 151 percent over the four day event with traffic up by 98 percent, resulting in total online sales of $10 million. Boxing Day was another high-performing day, as the company says it attracted more than 1.2 million visits to its site, representing a growth of 62 percent YOY.
Consumer uptake of click & collect also increased over the reportable period. Overall, 20.2 percent of online orders were collected in-store in 1H2019, compared to 19 percent in 1H2018. The company lowered its free delivery threshold from $100 to $49 and reduced the costs associated with same and next day delivery services, which Myer says has been well received by customers.
Moving forward, Myer says its key priorities will be on transforming its customer experience and increasing its stable of exclusive brands. The company’s online platform will also continue to be a focus and key asset for the business as it looks to re-stabilise after a tumultuous few years.
“The debt refinancing was completed in November 2018 and provides a stable platform for the next two years, with substantial headroom in all of our covenants. We remain focused on deleveraging and net debt was reduced by $57 million.
“There is no doubt that we are on the right path with the right plan, and the right people in place to execute it, including a strong relationship with all of our business partners; however there remains a lot of work to be done,” King said.
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