Yahoo Finance 'Deterioration': Myer profits tumble 800% in 'tough' conditions
Myer has posted a statutory net loss after tax of $172.4 million for the 2020 full year, a decline of more than 800 per cent on last year’s $24.5 million statutory profit.
The retail giant recorded a net loss after tax of $11.3 million, or a 140 per cent decline on 2019’s profit of $33.2 million, with Myer choosing to continue to suspend dividend payments.
The corporate earnings report revealed total sales were down nearly 16 per cent as a result of widespread store closures, with chief executive officer and managing director, John King, citing “deterioration” in trading conditions.
“The decision taken in March 2020 to temporarily close all 60 stores and stand down approximately 10,000 team members was one of the toughest decisions Myer has faced in its 120 years of operation,” King said.
In response to harsh restrictions, King said management reduced operating expenses by deferring non-essential expenditure and managing inventory levels.
Operating gross profit margin tumbled 85 basis points to 38 per cent as a result, “unwinding” the 62 basis point improvement achieved in the first-half of the year.
King revealed Myer was successful in its application for the Australian Government’s JobKeeper scheme, and of the $93 million received, a total of $41 million was paid to team members.
Yahoo Finance understands the remainder of the JobKeeper payments were passed back to employees in the form of subsidised salaries.
Unsurprisingly, online sales grew by nearly 100 per cent in the second half of the year compared to the prior year, with strong growth in beauty and homewares.
Myer partners with Amazon
The announcement follows Myer’s introduction of the Amazon Hub – a partnership with the online marketplace which would see 21 Myer stores become Amazon parcel collection points.
The scheme officially began on 9 September, with customers now able to select a Myer store as their collection point at the point of sale.
It’s hoped that the partnership would see more customers come into the store and take advantage of in-store services in doing so.
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