Myer Posts 1.9% Sales Rise Despite Rising Costs and NDC Challenges

Modest Sales Growth Amid Challenging Conditions

Myer Holdings Limited has released a preliminary trading update for the second half of fiscal 2025, revealing a cautious but positive sales performance despite a difficult retail environment. Total sales for the Myer segment rose by 1.9% to $837.2 million, with comparable sales increasing 1.5%. This growth was driven in part by a strong online channel, which saw a 9.0% uplift and now accounts for over 21% of total sales.

In contrast, the Apparel Brands division, which includes labels such as Just Jeans, Jay Jays, and Jacqui E, experienced a 3.9% decline in total sales to $211.2 million, with comparable sales down 3.7%. Online sales for this segment grew 3.5%, representing nearly 17% of its total revenue. These mixed results highlight the varying consumer demand dynamics across Myer’s retail portfolio.

Inflation and Operational Headwinds

The group’s performance was notably impacted by broader market pressures, including heightened promotional activity across the retail sector and inflation-driven cost increases. Wage growth, occupancy expenses, and foreign exchange fluctuations all contributed to margin pressures. Additionally, Myer faced company-specific challenges related to the ramp-up of its new National Distribution Centre (NDC) in Ravenhall, Victoria.

The NDC has experienced integration and automation issues that delayed the expected operational benefits and increased costs. Myer has acknowledged these difficulties and implemented interim solutions to mitigate the impact during the critical peak trading period. These include partnering with a third-party logistics provider, Toll, to handle up to 40% of online order fulfillment, significantly reducing strain on the NDC and stores.

Strategic Outlook and Leadership Confidence

Executive Chair Olivia Wirth expressed cautious optimism, emphasizing the company’s focus on resetting its omni-channel platform and embedding its Growth Strategy amid volatile market conditions. She highlighted the record growth in the Myer loyalty program and the strengthening of the Apparel Brands portfolio through recent acquisitions and restructures, such as sass & bide.

Looking ahead, Myer plans to showcase its strategic roadmap at an Investor Strategy Day scheduled for 28 May 2025. The event will provide further insights into how the company intends to navigate ongoing challenges and capitalize on growth opportunities in the evolving retail landscape.

While the second half trading update reflects a year of transition, Myer’s proactive measures to address operational bottlenecks and invest in leadership and capabilities suggest a commitment to long-term resilience and growth.