Myer FY25 Sales Rise 0.5% with Apparel Brands; EBIT Falls 13.8% Amid NDC Issues

FY25 Performance Overview

Myer Group’s FY25 results reflect a pivotal year of transition and integration following the acquisition of Apparel Brands. On a pro forma basis, total sales edged up 0.5%, with a stronger 1.7% growth in the second half, marking the first period of combined operations. This growth was driven by the six-month contribution from Apparel Brands, which now accounts for 26% of the Group’s sales, diversifying its retail portfolio.

However, profitability was under pressure. Earnings before interest and tax (EBIT) declined 13.8%, impacted by subdued consumer demand amid soft macroeconomic conditions and increased promotional activity across the sector. The Group reported a statutory net loss after tax of $211.2 million, heavily influenced by a non-cash goodwill impairment of $213.3 million related to Apparel Brands. This accounting adjustment reflects the share price at acquisition date rather than operational performance.

Operational Challenges and Cost Management

Operationally, Myer faced significant hurdles with its National Distribution Centre (NDC) in Ravenhall, Victoria. Since going live in August 2024, the NDC has experienced technological and logistical issues, resulting in an estimated $16 million EBIT impact for FY25. These challenges affected stock availability, particularly for Myer Exclusive Brands, and increased fulfillment costs.

In response, the Group implemented temporary mitigation measures to manage peak trading periods and has approved a long-term solution with an investment of approximately $32 million, targeting completion by FY27. Once fully operational, the NDC is expected to deliver annualized benefits of around $20 million, enhancing inventory management, reducing markdowns, and supporting omni-channel growth.

Cost pressures extended beyond the NDC, with the Group’s cost of doing business rising 22.6% due to wage increases, inflationary occupancy costs, and investments in capabilities to execute its growth strategy. To address this, Myer launched a Value Creation program aimed at reducing complexity and improving productivity, with a goal to lower cost ratios in FY26 despite ongoing headwinds.

Strategic Progress and Growth Initiatives

Myer is advancing its Growth Strategy with notable progress integrating Apparel Brands and specialty brands like sass & bide, Marcs, and David Lawrence (SBMDL). The Group is targeting $30 million in annualized synergies from Apparel Brands by the first half of FY27, alongside $10 million from SBMDL restructuring.

Customer engagement remains a focus, with the MYER one loyalty program expanding to a record 4.7 million active members and a tag rate increase to 79.5% for Myer Retail. The program’s relaunch is on track for October 2025, following a successful launch for Apparel Brands in August. Additionally, the rollout of Just Jeans’ new store formats and the introduction of new and returning brand partners across womenswear, beauty, and home categories signal efforts to refresh the product offering and enhance the shopping experience.

Early FY26 Trading and Outlook

Trading in the first seven weeks of FY26 shows encouraging momentum, with total sales up 3.1% compared to the prior corresponding period. This growth is driven by a 4.3% increase in Myer Retail sales, particularly in Home and Womenswear categories, while Apparel Brands sales declined slightly amid subdued New Zealand retail conditions.

Despite this positive start, the Group anticipates continued financial impacts from NDC remediation efforts and persistent cost pressures. The Value Creation program is expected to partly offset these challenges, with management cautiously optimistic about delivering sustainable growth and improved returns as integration and operational improvements take hold.