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Myer set to pay first dividend since 2017: Online sales boom

Thu 10 Mar 22, 11:00am (AEST)
Ecommerce - Shopping online concept - Shopping service on The online web.
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Key Points

  • Myer managed to grow sales by 8.5% even after losing 23% of in-store trading days in 1H22
  • The last time Myer paid a dividend was in September 2017
  • In-store and online sales momentum has continued in the first five weeks of 2022

Myer (ASX: MYR) is set to pay a dividend for the first time in four years as online and retail sales performed well in the face of lockdowns in the first-half of FY22. 

The company's stock is up almost 20% in early trade.

Financials at a glance

  • Total sales of $1.52bn, up 8.5%

  • Operating profit margins of 38.4%, down -24 bps

  • Net profit of $32.3m, up 55.2%

  • Interim dividend of 1.5 cents 

The interim dividend represents a yield of 3.33% based on Thursday's open price of 45 cents.

Lockdowns? What lockdowns?

Myer managed to grow Group sales by 8.5%, even though government-mandated lockdowns cost the company -23% of in-store trading days in the first-half.

Myer observed that sales in the lead up to Christmas was not affected by lockdowns or omicron, growing 17.1% for the two months ended 1 January 2022. 

Online sales growth was the star of the result, up 47.5% to $424m in the first-half, now representing 27.9% of all Myer sales. 

“Our online business has grown nearly fourfold in the past four years and is now one of the biggest online retail businesses in the country," said CEO John King.

"In key categories, our growth is significantly outpacing competitors, both multichannel retailers and online pure plays." 

To add some perspective, Kogan (ASX: KGN) sales have only increased around 330% in the past four years from $209.6m in first half FY18 to $698m in first half FY22. 

Solid cost control 

Margins decreased by -24 basis points to 38.4%, reflecting factors including:

  • Foreign exchange

  • Clearance of seasonal inventory built up over the lockdown periods

  • Increased supply chain costs

Trading update 

Sales momentum has carried through to the second-half, with sales growing 15.2% in the first five weeks of 2022. As well as 48.6% growth in online sales. 

Interestingly, Myer has built up an impressive cash position of $274m as at 29 January 2022 compared to -$20m of debt four years ago.

The cash position is quite high relative to Myer's market cap of just $336m.

Myer Holdings Ltd (ASX MYR) Share Price - Market Index
Myer 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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