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"These results are obviously disappointing and shareholders deserve better," says Myer CEO John King.
One of Australia's biggest retail brands has reported a 52 per cent plunge in profit for a financial year marked by shareholder indignation at a disappointing discount program that failed to deliver results.
The bottom line FY18 result for Myer (ASX: MYR) was a $486 million loss driven by a writedown of its goodwill and brand name in the first half.
Excluding that issue the underlying profit dropped by more than half to $32.5 million, while sales were down 3.2 per cent at $3.1 billion.
Myer CEO John King, who was only appointed to the role in June, is critical of the retailer's performance but seeks to convince shareholders he can turn Myer's fortunes around.
"These results are obviously disappointing and shareholders deserve better," King says.
"Since joining Myer in June 2018, I have completed a thorough review of the business, including visiting 44 stores and have met with customers, team members, suppliers, brand partners and landlords."
He says the company will now be making changes to its product ranges, store layouts and online offering ahead of the busy Christmas trading period.
"Later this month, we will launch our new Myer website, which will significantly enhance the overall user experience, in particular on mobile devices, with improved and faster search capability, clearer filtering and navigation, improved presentation of merchandise and clearer, more engaging brand and editorial journeys," he says.
"Elsewhere in the business, we have reduced costs that do not directly benefit the customer or enhance their experience in store or online.
"This includes removing a number of executive and management roles to put in place a more streamlined and accountable structure at the Support Office that is more closely aligned with our customers."
The executive also outlines a new "Customer First" plan which he claims will transform customer experiences at the store, enhance Myer's website and focus on Myer's brands and value for money.
"We will be focused on delivery and execution, not promises," King says.
"I am confident that with the successful execution of this plan, we will improve the performance of the business and deliver shareholder value."
Myer chairman Garry Hounsell, who was slammed a few months ago by Solomon Lew of majority shareholder Premier Investments, also expresses disappointment at the results.
"When it became apparent to the Board that the execution of the strategy was not going to deliver an improved financial performance, we made the decisive move to make significant leadership changes," Hounsell says.
""Following a global search, we appointed a highly experienced new leadership team, including John King as Chief Executive Officer and Managing Director in June 2018, Allan Winstanley as the Chief Merchandise Officer in June 2018, and Nigel Chadwick as Chief Financial Officer in January 2018.
"With these appointments, Myer bolstered its global retail and financial expertise, bringing best-in-class experience with highly relevant retail, merchandising and financial skills."
Hounsell adds that no dividend will be paid to Myer shareholders.
While sales were also down in the second half, chief financial officer Nigel Chadwick points to improved performance in terms of operating gross profit and net cash flow.
"Despite the continued challenging retail conditions, the second half performance showed some improvement on the first half, as evidenced by the improved operating gross profit margin and lower net debt despite the fall in EBITDA," Chadwick says.
Sales were down 2.6 per cent in the second half to $1.38 billion, while comparable store sales were down 2.4 per cent. An operating gross profit of $539 million represented a year-on-year improvement, with the margin up 109 basis points to 39 per cent.
As part of its restructuring program, Myer made made 30 employees redundant in the last week of August, including executive GM of marketing and customer, Louise Pearson.
Last month Myer brand ambassador and former Miss Universe Jennifer Hawkins announced she would not be renewing her contract with the retailer after 12 years as the face of its brand.
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