Australia's Myer's expanded loyalty program could bring cost savings, says Morningstar

Myer Holdings

19/03/2025 20:31

** Department store Myer's MYR.AX first-half profit before borrowing costs and taxes fell by 22% to A$59 million, while sales remained steady at A$1.8 bln

** Morningstar attributes profit decrease to supply chain issues and increased costs at firm's distribution center, which is expected to continue into second half

** Says MYR's newly acquired apparel brands are underperforming relative to their traditional department store segment

** Brokerage expects cost savings from expanding MYR's loyalty program to apparel brands' customers, introducing these brands online and better sourcing arrangements due to scale

** Predicts a modest sales CAGR of 1% over the next decade, down from 2% for the combined MYR and apparel brands' sales over the 5 years ending in fiscal 2024

** Brokerage cuts firm's 2025 adjusted NPAT outlook by 11% to A$50 mln

** Brokerage maintains fair value estimate at A$0.83/share

** Stock down 37.4% YTD

 (Reporting by Kumar Tanishk in Bengaluru)

 ((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk;))