UPDATE: Major retail giant Myer Holdings Ltd (ASX: MYR) has just announced a shocking decision to cut its final dividend to zero, following a staggering financial downturn. The iconic retailer reported a net loss of $211.2 million for FY25, primarily driven by significant write-downs amid a challenging trading environment.
Myer’s sales growth was a meager 0.5%, with total revenue hitting $3.67 billion. Chief Executive Officer Olivia Wirth emphasized that this year marked a “transition year” for the company, which was adversely affected by soft macroeconomic conditions, leading to a 30% drop in underlying net profit to $36.8 million compared to FY24.
The retailer’s substantial losses stemmed from a goodwill write-down related to its new division, Myer Apparel Brands. During FY25, Myer acquired five fashion brands from Premier Investments, including Just Jeans and Jay Jays, in a deal involving the issuance of 890.5 million new shares. This acquisition came at a significant cost, contributing to an additional $34.7 million in negative significant items.
Despite the grim financial report, Wirth remains cautiously optimistic about the future. “Our trading for the first seven weeks of FY26 has been positive,” she stated, highlighting emerging signs of consumer strength. Wirth also mentioned a relaunch of the Myer One loyalty program set for October 2023, with membership numbers reaching a record 4.7 million.
The company’s strategic review has led to the launch of the Myer Group Growth Strategy, a comprehensive plan aimed at achieving sustainable growth by FY29. However, Myer has not provided any timelines for resuming dividend payments, leaving investors anxious about future returns.
This urgent update underscores the critical state of one of Australia’s leading retailers, as it navigates through significant financial challenges and attempts to regain its footing in a tough market. Analysts and investors alike will be closely monitoring Myer’s next moves as it strives to turn around its fortunes amidst a backdrop of rising costs and shifting consumer behavior.
Stay tuned for further updates on Myer Holdings as developments continue to unfold.
