MYR Details
 
Operating gross profit margin fall in FY 16: Myer Holdings Ltd (ASX: MYR) reported that they opened ‘New Myer’ Warringah store and new Werribee store. There was also 7.2% improvement in Net Promoter Score in the flagship and premium stores due to the investment in services. Additionally, there was a 74% growth in omni-channel sales with profit and the same is growing well ahead of sales. The steps taken to improve productivity includes store exits and refurbishments, and investments done in building internal capability and specialist skills. In FY 16, the sales grew 2.9% to $3,289.6 million, and 3.0% on a comparable store basis. MYR reported in FY 16, the NPAT of $69.3 million which is in line with the company’s guidance. In addition, for 1Q FY 17, MYR reported 0.6% growth in the total sales to $719.2 million; and on a comparable stores sales basis, the sales grew 1.6%. On the other hand, MYR has reported a 164-basis points fall in the operating gross profit margin due to the concession sales and lower Myer Exclusive Brand sales.

 
FY 16 Financial Performance (Source: Company Reports)
 
MYR had revealed about exiting stores at Brookside, Orange, Wollongong and Logan, and expects EBITDA growth to exceed sales growth from FY 17 and a return to NPAT growth. MYR stock has fallen 3.46% in the last three months but moved up 13.06% in last one month (as of December 05, 2016). The stock is now trading at a slightly higher P/E. Further, market driven challenges in terms of competition do prevail. In last few years, Myer’s revenue growth has also been limited and the group has not really leveraged on growing population or economic scenario. We give a “Sell” recommendation on the stock at the current price of – $ 1.25

 
MYR Daily Chart (Source: Thomson Reuters)

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