Myer Holdings Limited (ASX: MYR) has reported its half-year results for FY25, highlighting steady sales growth despite a challenging economic environment and the company’s ongoing strategic transformation.
Navigating Economic Headwinds
Total sales for the 26 weeks ending January 25, 2025, came in at $1.83 billion, up 0.1% year-on-year, with comparable sales rising 0.8%. Online sales were a bright spot, climbing 4.8% to $409 million, now accounting for 22.3% of total sales.
However, net profit after tax (NPAT) fell to $42.4 million, compared to $52.0 million in 1H24, largely due to delays and disruptions at the company’s National Distribution Centre (NDC), which shaved $12 million off earnings.
Despite these hurdles, Myer maintained strong customer engagement, with its MYER one loyalty program hitting record highs. The program now boasts 4.6 million active members, a 6% year-on-year increase, with members accounting for a whopping 79% of total sales.
Strategic Reset in Motion
Under the leadership of Executive Chair Olivia Wirth, Myer has embarked on a major strategic overhaul, focusing on growth, efficiency, and restructuring underperforming assets. Key initiatives include:
- Finalising the Myer Group Growth Strategy
- Completing the acquisition of Apparel Brands (which includes sass & bide, Marcs, and David Lawrence)
- Securing a $150 million debt refinancing deal with CBA and NAB, expected to save $11 million annually
- Restructuring sass & bide, with 10 standalone stores closing and new concession outlets launching in Myer stores
According to Wirth, Myer is “resetting the business to become a retail powerhouse,” with a focus on unlocking shareholder value and long-term profitability.
National Distribution Centre Challenges & Fixes
The NDC, launched in August 2024, was meant to streamline Myer’s online fulfilment. Instead, it suffered automation and integration issues, leading to stock flow problems and higher fulfilment costs.
As a result, stores had to take on online order fulfilment, driving up costs and impacting Myer Exclusive Brand (MEB) stock availability, particularly in Q1 FY25.
A comprehensive review is now underway, with new Chief Supply Chain Officer Darren Wedding (formerly of Super Retail Group) leading the remediation efforts. While the initial benefits of the NDC will be delayed, Myer still expects to realise $5-10 million in annual savings once issues are resolved.
Looking Ahead: A Transition Year
The second half of FY25 is expected to remain challenging, with Myer already reporting a 2.6% drop in sales in the first five weeks of 2H25. The NDC issues will continue to impact performance, but the sass & bide, Marcs, and David Lawrence restructure is set to deliver a $10 million annual EBIT benefit from FY26 onwards.
Myer will outline its long-term strategic pillars at an Investor Strategy Day on May 28, 2025, where it plans to detail how it will drive sustainable earnings growth and shareholder returns in the years ahead.
