Myer revenue shrinks 3.8% in FY11

Myer (ASX:MYR) reported falling revenue and underlying profit in FY11, and predicted a further profit drop in FY12, but said it was encouraged by growth in online sales

Myer (ASX:MYR) has reported a 3.8 per cent slump in FY11 revenue to $3.16 billion, despite strong growth in online sales.

The retailer has also forecast flat sales and an up to 10 per cent decline in net profit in the coming year.

Net profit before certain one-off items fell 3.6 per cent in FY11 to $162.7 million, while ebit was down 4.4 per cent to $258.9 million.

Despite the declines, Myer CEO Bernie Brookes said he was “pleased with the resilience of Myer's performance on a number of levels,” considering the challenges plaguing the retail environment.

Sales for the year were impacted by around $32.4 million as a result of the decision to exit whitegoods and gaming, and cull shelf space for music and DVDs — a move aimed at improving gross profit margins in the future.

Like for like sales slumped 5.5 per cent, although gross profit margins on sales increased to nearly 40.3 per cent.

Excluding the troubled electrical division, sales fell by just 1.2 per cent. Myer expects to complete the restructuring of this division in 1H12.

In contrast to store revenue, Myer said it had seen rapid recent growth in online sales. The company is currently revamping and plans to relaunch its e-commerce offering, and is developing other online sales initiatives.

The company is considering including the consoles, music and DVD product lines it cut from its physical stores in its online offering, where they won't compete for shelf space with higher-margin products.

MYR shares grew 1.94 per cent on Thursday to $2.100.

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