Australia's Myer jumps to 11-month high as retailer challenges dismal expectations

Myer Holdings

06/02/2024 03:56

By Rishav Chatterjee
       Feb 6 (Reuters) - Shares of Myer Holdings  MYR.AX 
surged to an 11-month high on Tuesday, after the retailer defied
market expectations around their first-half sales as it
navigates the effect of a cost-of-living crisis. 
    The Australian department store forecast interim sales of
A$1.83 billion (about $1.2 billion), which analysts said were
better than feared, sending its shares up around 17.3% to
A$0.78. 
    Australia's consumer stocks have failed to enthuse investors
around their recovery, unlike other sectors have done over the
past half-year, with market participants expecting a drag in
both top and bottomline numbers for interim results.
    "I think what we have seen today is a classic case of
under-promising and then over-delivering, and the share price of
Myer reacted accordingly by shooting higher," Tim Waterer, chief
market analyst at KCM Trade, said.
    Myer, which has been looking for a new company chief as boss
John King plans to exit in June, said that the firm had to fight
inflationary pressures and store closures which had an impact on
profits. 
    The firm however flagged that consumers are expected to
remain cautious in the second half of fiscal 2024 as the
country's interest rates peak and customers dial back on luxury
spending. 
    The A$1.83-billion sales forecast for the first half
reflects a minor drop from previous year, but is about 14% above
pre-COVID levels, Myer highlighted in a trading update on
Tuesday.
    "Investors were not holding particularly great hopes ahead
of the trading update, so it was a pleasant surprise in terms of
the sales figures, all things considered," KCM Trade's Waterer
said. 
    

($1 = 1.5401 Australian dollars)

 (Reporting by Rishav Chatterjee in Bengaluru; Editing by
Mrigank Dhaniwala)
 ((Rishav.Chatterjee@thomsonreuters.com;))