David Jones has reported a 9.2% fall in third-quarter sales revenue compared to the previous year but says sales improved in April to trade in line with last year.
The upmarket department store this morning reaffirmed its full-year profit guidance of zero to 5% growth after reporting sales of $411.6 million of merchandise in the quarter ended April 25, compared with $453.3 million in the same period last year.
Shares initially rose 2%, but were later pulled down and closed 4 cents or 1.2% lower at $3.28.
On a like-for-like basis, its sales fell by 10.8%, meaning sales have
fallen by 8.7% on that basis in the first nine months of the financial
year.
"We were pleased to see the improvement in trading performance in April
and were well prepared in terms of marketing, promotional activity and
service levels to fully capitalise on the situation, demonstrating our
flexibility to leverage up in all aspects of our business,'' said the
David Jones managing director, Mark McInnes.
He said cosmetics had been the strongest seller, but homewares remained weak.
"Obviously the stimulus package had a benefit to confidence in general ... but also that trend has continued for is in the first 10 days of Q4 in May so it's obviously not just April,'' Mr McInnes said. "It's just a general sense of it being a little bit more confident.
He said it was impossible to predict whether the solid recent
trading would continue in the coming months, but said based on previous
experiences, department stores were traditionally "first in, first
out'' of a downturn.
"We just saw a general improvement in our base business in every
category of our business (in April),'' he said. "People were confident
in spending across the board.''
The Australian Bureau of Statistics today reported a 13.2% rise in
department store sales in March after a 9.8% fall in February.
"Obviously the stimulus package has had a benefit in confidence in
general,'' Mr McInnes said. "That is good in our business.''
Mr McInnes said David Jones planned to add 25,000 extra working hours
for its staff in May in anticipation of strong sales due to Mother's
Day and its half-year clearance.
The company said its new Doncaster store in Victoria had been
performing strongly and was on track to deliver pre-tax earnings of $7
to $8 million in its first full year of trading.
"We are well-positioned despite the difficult macro environment,'' Mr
McInnes said, but added it was too early to decide whether a turnaround
had begun.
jfreed@smh.com.au
SMH
