Key Highlights

• MYR shares fell 7.69% to $0.18 on 9 September 2026 as consumer sentiment concerns weighed on retail stocks.

• Pro forma total sales increased just 0.3% in FY26, with comparable sales up 0.7%, reflecting challenging consumer conditions.

• Operating Gross Profit Margin declined on a pro forma basis to approximately 39.2%–39.3% from 40.3%, due to higher promotional activity.

• Active MYER one loyalty members reached a record 5.3 million (FY25: 4.7 million), and the tag rate hit a record 81.5% in Myer Retail.

Shares in Myer Holdings Ltd (ASX:MYR) declined 7.69% to $0.18 on 9 September 2026. The market might be assessing a preliminary FY26 trading update released on 27 July 2026 that painted a picture of a Business navigating one of the most challenging consumer environments in recent memory. Cost-of-living pressures, Interest Rate increases, weaker housing market conditions and a warmer-than-average winter combined to constrain household spending and weigh on discretionary retail performance through the second half of the fiscal year.

Sales Performance: Top-Line Growth Masks Underlying Softness

Myer Group's preliminary FY26 total sales of $4,089 million represent an increase of 11.3% on an actual basis compared with FY25. However, this figure requires an important context adjustment: FY25 actual results included 12 months of Myer Retail and only six months of Myer Apparel Brands, whereas FY26 incorporates 12 months of both. On a pro forma like-for-like basis — treating both periods as including 12 months of both segments — total pro forma sales grew just 0.3%, with Group comparable sales up 0.7%.

Myer Retail comparable sales grew 1.0%, while Myer Apparel Brands comparable sales declined 0.3% on a pro forma basis. Within the product mix, the company reported growth in Home, Womenswear and Kids categories, and in Just Jeans and Marketplace and Concession sales. These gains were offset by weaker performance in Beauty and Portmans.

Margin Pressure From Promotional Activity

A notable aspect of the FY26 update is the contraction in operating gross profit (OGP) margin on a pro forma basis. OGP in the range of approximately $1,601 million to $1,607 million was up 13.8%–14.3% on an actual basis but down approximately 2.1%–2.5% on a pro forma basis. OGP margin landed in the range of approximately 39.2%–39.3%, compared with 40.3% in FY25 on a pro forma basis, with the company attributing the compression to higher-than-planned promotional activity used to stimulate Demand in a weak consumer environment.

This margin dynamic is notable because it illustrates the challenge retailers face in a low-demand environment: maintaining Volume through promotions comes at a cost to margin, while allowing volumes to fall preserves margin at the expense of Market Share and Fixed Cost coverage. The cost of doing business (CODB) percentage was described as broadly in line with the FY26 target of approximately 29%.

Consumer Sentiment at Recent Lows

The company was explicit about the macroeconomic backdrop, describing consumer sentiment as reaching its lowest levels in recent times through the second half of FY26. The company cited inflationary effects from higher fuel prices arising from Middle East conflict, three interest rate increases in CY26, slower household income growth, a weaker housing market and financial uncertainties for many households. These pressures compounded in June and July, with performance described as being significantly constrained, further affected by a warmer-than-average start to winter in major Australian cities — an adverse weather impact on seasonal apparel sales.

The company noted that trading was volatile on a month-to-month basis through 2H26, including a stronger result in May that gave way to a material downturn in June and July.

Strategic Progress Despite Headwinds

Despite the challenging trading environment, Myer reported a range of strategic achievements during FY26. Active MYER one loyalty members reached a record 5.3 million (up from 4.7 million in FY25), and the tag rate in Myer Retail reached a record 81.5%. The company launched 37 new brands in Beauty and 29 across Womenswear and Menswear, and secured access to global brands including Fenty Beauty, La Mer, Guerlain and GAP. A new Myer Marketplace platform was launched in June offering 25,000 new products, and the Myer Media Network was launched using the MYER one retail media platform.

Value creation and integration synergies were delivered through the closure of the Myer Asia sourcing office, closure of one overseas hub, reorganisation of staffing flexibility, and the restructuring of retail operations in Myer Apparel Brands.

Conclusion

Myer's FY26 trading update presents a business that has made genuine strategic progress while facing an increasingly adverse macro environment. The pro forma sales growth of just 0.3% and margin compression from promotional activity reflect a discretionary retailer in a difficult position. The FY26 full-year results, due in September 2026 following audit completion, will provide the definitive financial picture including any Impairment assessments and significant items. The near-term consumer outlook, which management described as cautious, will be the primary determinant of whether the second half of FY26 represented a trough or the beginning of a more prolonged period of constrained retail performance.