It’s been well known that the department store sector of retailing has been doing it tough for most of the past year, and figures released on Tuesday from Westfield confirmed that with news of a large, 3.8% fall in sales in the September quarter.
Myer, the country’s biggest department store group, confirmed that news yesterday in its first quarter sales update which showed a fall of 3.5%, to $681.4 million, in the 13 weeks to October 29.
And despite the weak result, Myer reaffirmed its profit and sales guidance for the full year.
Like for like (or same store) sales fell a nastier 5.1% in the 13 weeks, the company told the ASX yesterday.
Myer said that excluding its rationalised electrical categories including whitegoods, movies and music, gaming consoles and GPS were down only 2.7% on the prior period.
"Our decision to rationalise our electrical offer continues to impact sales, however these decisions are expected to result in sales from higher margin categories as floor space is reallocated,” the company said in yesterday’s statement to the ASX.
Myer said during the first quarter the key categories of womenswear and youth continued to be the strongest performers.
The company said its guidance remained unchanged, assuming no deterioration in trading conditions, with Myer forecasting 2011-12 sales to be flat and net profit to be up to 10% below 2010-11 of $162.7 million.
"Global and domestic economic conditions will dictate when consumer confidence returns to more normal levels. Myer is very well positioned to benefit from any improvements in discretionary retail conditions when they occur," the company said in the statement.
Myer chief executive Bernie Brookes said that as the first quarter progressed sales had gradually improved against last year.
He also welcomed the interest rate cut announced last week by the Reserve Bank which should help trading as retailers head into the crucial Christmas trading period.
Last month Woolworths and Wesfarmers released the first quarter sales figures for their respective discretionary retail chains (Big W, Dick Smith, Target and Kmart) with these retailers also suffering from declining like for like sales.
Myer shares ended up 6.4% or 15c at $2.48 yesterday.
Building products group CSR said first half profit rose 13%, and it now expects a full year profit at the lower end of market forecasts.
CSR told the ASX yesterday that net profit from continuing operations was $34.9 million in the six months to September 30, up from $30.8 million in the previous corresponding period.
Revenue fell 4% to $937 million, and earnings before interest and tax (EBIT) were down 18% to $136.9 million.
Profit growth was primarily the result of lower net finance costs and an increased contribution from the property division, CSR said.
The company said building Products (excluding the Viridian glass business) saw earnings before interest and tax (EBIT) fall 10% "on weaker construction markets in Australia and New Zealand".
The Viridian loss of $6.9 million was in line with previous guidance.
Earnings before interest and tax at the group’s aluminium business fell 22% to $43 million which was also in line with previous guidance.
And the property EBIT was up 21% to $17.8 million due to sale of the Brendale residential site to Defence Housing Austral.
The company said it expects net profit before significant items for the full year to be at the lower end of the consensus analyst forecast range of $82 million to $100 million.
The shares rose 2% or 5c to $2.41 yesterday.
