Goodwill Impairment and NDC Woes Cloud Myer’s FY25 Profit Outlook
Myer Holdings reported a 13.8% revenue increase in FY25, boosted by its acquisition of Apparel Brands, yet faced a statutory net loss of $211.2 million due to goodwill impairment. The integration of Apparel Brands is underway, with strategic growth initiatives in motion.
- Revenue up 13.8% to $3.0 billion driven by Apparel Brands acquisition
- Statutory net loss of $211.2 million due to $213.3 million goodwill impairment
- Operating profit before significant items down 30% to $36.8 million
- No final dividend declared; special dividend of 2.5 cents per share paid
- National Distribution Centre challenges and workplace safety incident impact operations
Revenue Growth Amid Strategic Expansion
Myer Holdings Limited has reported a 13.8% increase in revenue for the 52 weeks ended 26 July 2025, reaching $3.0 billion. This growth was largely driven by the acquisition of Apparel Brands, completed in January 2025, which added a six-month contribution to the financial results. The acquisition expanded Myer’s footprint in the Australian and New Zealand apparel retail market, positioning the Group as the second largest apparel retailer in the region.
Goodwill Impairment Clouds Statutory Results
Despite the revenue growth, Myer reported a statutory net loss after tax of $211.2 million, primarily due to a non-cash goodwill impairment of $213.3 million related to the Apparel Brands acquisition. This impairment reflects the adjustment of purchase consideration to align with the share price at the acquisition announcement, which was significantly lower than at completion. Excluding significant items, the Group’s net profit after tax was $36.8 million, down 30% from the previous year, highlighting the impact of increased costs and subdued consumer demand.
Operational Challenges and Strategic Response
Myer faced operational headwinds including increased costs of doing business, wage inflation, and challenges at its National Distribution Centre (NDC) in Ravenhall, Victoria. The NDC experienced implementation issues affecting stock movement and online order fulfillment, prompting a remediation plan and temporary reliance on third-party logistics. Additionally, the Group mourned a fatal workplace accident involving a third-party contractor at the NDC, underscoring the critical importance of safety measures.
Dividend and Remuneration Highlights
The Board declared no final dividend for FY25 but paid a fully franked special dividend of 2.5 cents per share in March 2025 following the Apparel Brands acquisition. Executive remuneration outcomes reflected the financial performance, with no short-term incentive awards paid for FY25 due to the underlying net profit falling short of targets. The Group continues to implement a growth strategy focused on customer loyalty, product and brand mix, omni-channel retailing, and supply chain efficiency.
Outlook and Integration Progress
Integration of Apparel Brands is progressing, with the Group targeting $30 million in annualised synergies by the first half of FY27. Early trading momentum in FY26 shows a 3.1% increase in total sales in the first seven weeks on a pro forma basis. Myer has also refinanced its debt facilities, improving financial flexibility and reducing interest costs. However, the Group remains vigilant to risks including macroeconomic pressures, competitive retail dynamics, and ongoing operational challenges at the NDC.
Bottom Line?
Myer’s FY25 results reflect a pivotal year of transformation, but the goodwill impairment and operational hurdles signal cautious eyes on the integration and execution ahead.
Questions in the middle?
- How will Myer manage and mitigate ongoing challenges at the National Distribution Centre?
- What progress and risks remain in realising the $30 million synergy target from Apparel Brands integration?
- Will Myer’s new growth strategy translate into sustained profitability and shareholder returns in FY26 and beyond?