Significant problems at Myer’s troubled high-tech warehouse have weighed heavily on its bottom line, sending the retailer’s shares plunging.
Myer made a $36.8 million underlying profit in 2024/25, down 30 per cent from the previous year. The result was also about half of the $71.1 million it made two years ago.
For the first time since 2021, Myer won’t pay shareholders a final dividend, after a 2.5 cent per share interim payout in March.
In morning trading on Tuesday, Myer shares were down 21.6 per cent to a three-year low of 50 cents.
Executive chair Olivia Wirth told analysts the department store’s gross profit would have been flat if not for problems at its national distribution centre in the Melbourne suburb of Ravenhall.
The 40,000-square-metre facility was supposed to transform Myer’s distribution network and fulfil up to 70 per cent of online orders, but has been plagued by “significant implementation issues” since opening in August 2024.
A worker was crushed to death by a stock collection robot in 2024, and high-margin stock was “stuck” in the automated warehouse during a key trading period.
The facility hasn’t been performing as expected, costing Myer an estimated $16 million in the financial year.
As a short-term solution, Myer has hired a third-party logistics provider to support its order fulfilment through the end-of-year trading period.
Myer also will spend $32 million to overhaul the warehouse, with completion targeted for 2026/27.
It still expects to reap $20 million of cost savings once the fix is in place.
On a happier note, Ms Wirth said that Myer was starting to see benefits from its acquisition of Premier Investment’s portfolio of five Apparel Brands – Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E.
Myer reported $3.68 billion in sales for the year to July 26, up 0.5 per cent from the year before.
In the first seven weeks of the new financial year, sales were up 3.1 per cent.
Ms Wirth said the year was one of transition for the business, which is in the middle of a multi-year transformation.
“We are making great progress on our growth strategy,” she said.
“We’ll continue to work towards our plans to drive growth and build what we believe will be Australia’s most powerful retail platform.”
Myer ended the year with $168.1 million in net cash, up $54.3 million from the end of 2023/24.
But its statutory bottom-line result was still in the red, at a net loss of $211.2 million.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
