Myer profit, dividend likely to slump as retail struggles

THE under-performing Myer department store chain is expected to report a fall in annual profit of as much as 15 per cent.

In May Myer warned that tough trading conditions could lead to a further fall in profit, after initially expecting its profits for the year to July 30 to fall by 10 per cent.

A City Index analyst, Peter Esho, said he did not expect any surprises when Myer reported its full-year results on Thursday.

''I think the result might come in line with expectations, only because there's been a very slow resilience by retailers in the last few months,'' he said.

However, the dividend Myer paid its shareholders may be lower than expected as it reinvests money in its stores.

''They need to refurbish to remain relevant,'' Mr Esho said.


Myer has axed 100 jobs this year because of a slowdown in sales.

In June its shares fell to $1.69, their lowest level since the company listed on the Australian Securities Exchange in 2009.

Mr Esho said he was not sure if the company had the managerial ability and the financial capacity to move into the modern era.

He also questioned Myer's online strategy, saying that while it had been promoting its website, it was still a very insignificant part of its overall sales mix.

''The attention it gives to online doesn't equate to its online earnings,'' he said.

Third-quarter sales for the 13 weeks to April 28 were almost 1 per cent lower than in the same period in the previous year, at $651.1 million.

Like-for-like sales for the quarter, which strip out the effects of new store openings or closures, fell by 2.1 per cent.