Why Did Myer’s Shares Plunge Despite Meeting Earnings Expectations?

Context of the ASX Inquiry

Myer Holdings Limited (ASX, MYR) recently responded to an ASX Aware Letter following its FY2025 full year results announcement. The ASX sought clarification after Myer's shares plunged sharply from $0.64 to $0.45 immediately after the results were released on 23 September 2025. The exchange questioned whether Myer's reported earnings materially differed from market expectations and if the company had complied with continuous disclosure obligations.

Earnings Performance and Market Expectations

Myer confirmed it did not publish formal earnings guidance for FY2025. Instead, the company relied on median forecasts from seven sell-side analysts to gauge market expectations. According to Myer, its underlying net profit after tax (NPAT) for FY2025 was $37 million, which was approximately 9% below the median analyst forecast of $41 million. Sales and EBIT figures were close to expectations, with sales slightly above and EBIT about 5% below median estimates.

Despite this variance, Myer argued the difference was not material enough to trigger a disclosure obligation under ASX Listing Rules. The company emphasized that underlying NPAT, which excludes significant one-off items, is the most relevant measure for assessing financial performance and market expectations.

Impact of One-Off Items and Goodwill Impairment

A key factor influencing the statutory results was a substantial $213.3 million goodwill impairment related to Myer Apparel Brands. This non-cash charge reflected a reassessment of the brand's value following a significant decline in Myer's share price from 98.5 cents at acquisition completion to 64.5 cents at announcement. Additional one-off costs included strategic transaction expenses, restructuring, and integration costs totaling $34.7 million.

Myer clarified that these items are excluded from underlying earnings to provide a clearer picture of ongoing operational performance. The company stated that these impairments and costs, while significant, do not reflect the core trading performance and therefore should not be conflated with market expectations for earnings.

Compliance and Disclosure Practices

Myer affirmed its compliance with ASX Listing Rules, particularly continuous disclosure obligations under Rules 3.1 and 3.1A. The company explained that it became reasonably certain of its earnings position only during the final audit and board approval process completed on 23 September 2025, coinciding with the results release. Prior to this, no material variance from market expectations was identified that would have necessitated earlier disclosure.

Furthermore, Myer stated it was not aware of any other information that could explain the share price volatility following the results announcement. The company confirmed that its responses to the ASX inquiry were authorized by its board and continuous disclosure officers.

Market Reaction and Forward Outlook

The sharp share price decline despite earnings largely meeting expectations suggests market concerns may extend beyond the headline financials. Investors may be weighing the implications of the goodwill impairment, cost pressures including inflation and wage increases, and the broader retail environment challenges. Myer's emphasis on underlying earnings aims to reassure stakeholders of the business's core resilience, but the market's reaction signals ongoing scrutiny.