David Jones tips big profit jump, dumps July stocktake sale: Economy roundup

Good news in the retail sector this morning, with David Jones announcing this morning it has increased its profit guidance after strong sales results.

Shares in the company increased by up to 11% after the announcement. It now expects second-half net profit to rise by up to 30% from the same period in the previous year.

Net profit for the year ending 25 July is now expected to rise by up to 12%.

“May and June reflects a significant positive shift in our trading performance and demonstrates the resilience of the David Jones customer and brand strategy,” chief executive Mark McInnes said in a statement. “History has shown that we are `first in and first out’ of a downturn.”

McInnes said David Jones will not be holding its annual July stock clearance sale this year.

“Whilst we still have to trade through July to complete the fourth quarter, and we are not planning to repeat the clearance of excess inventory undertaken in July 2008, our trading to date has been pleasing and well above our expectations,” he said.

The Australian share market has opened higher today due to positive leads from Wall Street. The benchmark S&P/ASX200 index was up 59 points or 1.52% to 3945.9 at 12.10pm AEST. The Australian dollar was also up to US81 cents.

Commonwealth Bank shares jumped 1.2% to $39.38, while AMP gained 1% to $4.88. Westpac gained 1.88% to $20.14 as NAB also gained 0.6% to $22.50.

Figures from the Reserve Bank of Australia show that private sector credit dropped by a seasonally adjusted 0.1% during May, while total credit rose by 3.9% in the year ending in May 2009.

Meanwhile, the Australian Competition and Consumer Commission has now cleared the takeover of beer and wine company Lion Nathan by Japanese group Kirin Holdings.

Kirin Holdings will now control brands including Tooheys, XXXX, Hahn and Boags, and has already received approval from the Foreign Investments Review Board.

“Lion Nathan currently anticipates that it will lodge the scheme booklet with ASIC [the Australian Securities and Investments Commission] in July/August and that the scheme meeting will be held in September/October 2009,” Lion Nathan said.

In the US, the Dow Jones Industrial Average gained 90.99 points or 1.08% to 8529.38.