Myer warns of Omicron blow despite lift in sales

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Daniel NewellThe West Australian
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Myer chief executive John King said the results demonstrated the resilience of the business to overcome COVID-19 setbacks.
Camera IconMyer chief executive John King said the results demonstrated the resilience of the business to overcome COVID-19 setbacks. Credit: Matt Jelonek/The West Australian

Myer has joined a growing list of high-profile retailers to warn that the rapid spread of Omicron in the Eastern States in the lead-up to the vital Christmas trading period is likely to hit its bottom line.

The department store chain said in an unaudited trading update on Tuesday that sales in the five months to the start of January were up just over 12.3 per cent compared to the prior corresponding period, despite it losing 27 per cent of trading days due to COVID-19 enforced store closures.

Myer said bricks and mortar trade in the lead-up to Christmas was strong, with sales for the last two months of last year up 17.1 per cent compared to the same time a year earlier. Online sales were 54.3 per cent higher, making up 27.7 per cent of total sales.

But the gains were offset by higher operating costs, mostly associated with the withdrawal of the Federal Government’s JobKeeper support payments received in the prior corresponding period.

Myer chief executive John King said the results demonstrated the resilience of the business to overcome COVID-19 setbacks.

“Whilst we are seeing Omicron impact sales post Christmas, we will continue to focus on growing our strong online business, ongoing engagement across our Myer one program and disciplined management of costs and inventory,” Mr King said.

The update came just a day after investors savaged bedding and homeware chain Adairs after it revealed the scale of COVID-driven supply woes and forced lockdowns.

Shareholders wiped $150 million from the national retailer’s value, after it admitted the rolling supply chain crisis had ratcheted business costs higher and disrupted stock flow from Asia.

Trading days at its bricks and mortar outlets were cut in half in NSW and Victoria during the first six months of the year amid Delta wave restrictions, costing the company between $30m and $36m in earnings.

Along with the likes of Temple and Webster, Nick Scali, Kogan, JB Hi-Fi, and Harvey Norman, Adairs was a major COVID winner, blowing past its pre-COVID valuation within six months of the pandemic arriving.

At one point Adairs had expanded by more than 800 per cent on its COVID nadir.

Candlemaker and mall staple Dusk was another retailer to blame supply chain issues and lockdowns for an underwhelming six months, its own share price falling to a near 11-month low $2.65.

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