Department store Myer expects lower first-half profits as it contends with inflationary pressures

Department store Myer has contended with inflationary pressures and greater promotional activities by other retailers, which it says will impact first-half profit.

Myer is expecting profit to come in between $49 million and $53m for the 26 weeks to the end of January.

The retailer in a trading update on Tuesday said this included the unfavourable impacts of store closures and inflationary cost pressures.

Myer expects sales for the half to be down 3 per cent on the prior corresponding period to $1.8 billion, while group online sales are expected to be $390.1m, up 2 per cent.

“Like many retailers, we have had to contend with inflationary pressures and greater promotional cadence, which has had an impact on profits,” chief executive John King said.

“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.

“Our focus remains on seeking to drive further and sustainable cost efficiencies and inventory management.”

Myer also said the board had been undertaking a search for a new chief executive and would update the market on progress in due course.

Mr King announced in June last year he would leave the top job in the second half of 2024 to return to the US to be with family due to health circumstances.