Myer Holdings Ltd (ASX: MYR) has reported its half year result to 26 January 2019, is the share price a buy?
Myer Holdings is the name behind the popular department store retailer. Myer is named after Sidney Myer who arrived in Australia from Russia in 1899. Myer is an upmarket department store business. Sidney Myer and his brother Elcon opened the first Myer store in Bendigo in 1900, and opened a second Bendigo store in 1908. In 1911 Sidney Myer bought adjoining properties on Melbourne’s Bourke Street and opened the Myer Emporium. Today, Myer has tens of thousands of shareholders and offers retail products from over 1,000 suppliers through its nationwide ‘big box’ department stores.
Here’s What Myer Holdings Reported
Myer reported that total sales were down 2.8% to $1.67 billion, with comparable store sales down 2.3%. However, online and ‘omnichannel’ sales grew by 18.6% to $151.2 million.
Operating gross profit fell by 0.2% to $643.8 million. However, operating/underlying EBITDA grew by 4.9% to $113.6 million (click here to learn what EBITDA means).
Operating net profit grew 3.1% to $41.3 million and reported net profit went from a loss of $476.2 million last year to a profit of $38.4 million this year.
Myer Dividend and Balance Sheet
Although Myer did generate a net profit, the company decided not to declare a dividend at this stage.
However, operating cash flow increased by $8 million to $173 million and this helped net debt reduce net debt to $57 million.
Myer Management Comments
Myer CEO and Managing Director John King said: “This result demonstrates the positive customer response to a number of initiatives from our Customer First Plan, particularly during the all-important Christ and Myer sale periods.”
Is Myer a buy?
It is far too early for me to consider Myer a turnaround, we at least have to see the full year report.
I like the current plan of focusing on non-customer related costs, profitability and cash management, it seems to be working. I’m also glad to see that Myer is focusing on its online business.
At the pre-open price, Myer is priced at under nine times this half year report’s earnings, so if the next six months are good Myer could be quite cheap today. But it’s not the type of investment that I’d want to make, instead I would rather go for one of the growth shares mentioned in the FREE report below.
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