Myer announced it’s first dividend in four years and John King, the group’s chief executive, said the interim dividend of 1.5 per share was a sign of confidence that the company is on the way to recovery.
Myer’s statutory profit fell to $32.3 million from $43 million a year earlier, but if last year’s wages subsidies are excluded, it would have posted a 55.2 per cent increase.
Myer’s shares had risen 26 per cent to 52 shortly before the market closed on Thursday.
The company’s tiny dividend payment reminded investors of the importance of Myer’s continued existence.
Myer has a long history in Australia’s retail industry, but its best chance of survival lies in King’s strategy of reducing the company’s store footprint and building its online business.
During the first half of the financial year, the company’s total sales increased by about 8 per cent. The impressive growth in online sales was also significant.
The company was hit by the omicron hit in December and January, which had caused a drop in sales activity across the board. The second half of the year has started well, with sales up 15.2 per cent.
King believes that the strong performance of online retailers globally will eventually lead investors to rerate Myer’s stock.
The percentage of total sales that were generated online rose from 20.6 percent to 27.9 percent during the period.
The strong performance of Myer’s online business was partly attributed to the disruptions caused by the omicron and the lockdowns. However, it is still unclear how profitable Myer’s online sales are.
The company’s online division has been instrumental in helping Myer navigate the pandemic.
Myer One, the company’s loyalty program, has 3.5 million active members. During the first half of the year, the program’s share of total transactions increased by 60 basis points.
King says Myer’s discussions with its landlords have resumed, with some of them willing to provide the company with capital to improve its stores.
While the company’s store network can help generate sales online, it is not sufficient to sustain the company’s long-term survival.
Online department stores in New Zealand like Onceit are experiencing strong growth while bricks and mortar stores lag. You can save at Onceit with a Onceit coupon.