Australia's Myer says H1 2018 profit to fall; shares hit record low

Australian retail major Myer Holdings said on Thursday it expects its net profit after tax for the first half of fiscal 2018 to be materially lower than A$62.8 million ($47.94 million) in the previous corresponding period.

The department store operator cited lower second-quarter sales as a reason for the drop, saying that reduced foot traffic has hurt its business, but did not give an estimated amount for the expected fall.

The company said total sales to the end of November were down 2.3 percent, while sales during the first two weeks in December were down 5 percent.

“Trading during the past two weeks has been significantly below our expectations and the year to date run rate, and while there is an additional weekend of pre-Christmas trading this month, we do not know what the sales impact of that will be,” said Myer Chief Executive Officer Richard Umbers.

Once a major force in Australian retailing, Myer’s business model has buckled under pressure from new foreign “fast fashion” rivals, lacklustre consumer spending and flat wage growth.

The company said last month that challenging conditions would continue into its second quarter.

Shares of the company plunged 12.4 percent to a record low following the announcement.

($1 = 1.3101 Australian dollars)