Myer and David Jones release sales results, shares flat: Economy Roundup

The retailers have come out in force today, with department store giants Myer and David Jones both reporting their first quarter results.

Myer announced total sales growth of 5.2% to $717.1 million for the three months to October, while like-for-like sales grew by 2.9%. The results come after the company recently finished a $2.2 billion float on the ASX.

The company also announced it is on track to meet prospectus pro forma forecasts of 3% total sales growth for the 2010 financial year, with EBIT growth of 10.7%.

“The work we have done to improve range and fashionability, refresh our stores to make them more inspiring and shoppable for customers, and improve in store execution is starting to bear fruit,” chief executive Bernie Brookes said in a statement.

“We are pleased to report that we have made a strong start to the year.”

Brookes also said the business is prepared for the Christmas period, and noted that consumer sentiment is higher when compared to this time last year.

Meanwhile, department store rival David Jones has recorded just a 2.2% increase in sales for the first quarter, but says it is still too early to provide a full guidance for the first year.

Underlying total sales rose 4.5%, with sales revenue reaching $452.1 million for the quarter ending 24 October, compared to revenue of $442.3 million during the same quarter last year.

Chief executive Mark McInnes said there are some indicators business will continue to remain strong during the second quarter, but warned it is still “too early for us to provide any guidance update until after we have traded through the all important second quarter, which is the key component of our company’s first half profit”.

“Our better than expected trading in 1Q10 is a good sign for our business as we enter the all important Christmas trading period, especially given we will be cycling the worst trading conditions (2Q09) we have experienced in more than 20 years.”

The current guidance is for up to 5% growth in net profit for the 2010 financial year. Excluding the expenditures on the redevelopment of the flagship Bourke Street store in Melbourne, underlying like-for-like sales grew by 1.9%.

Shares flat after marginal Wall Street gains

The Australian sharemarket has opened flat today, after stocks in the US also made little gains despite the Federal Reserve announcing a decision to keep rates as close to 0% for as long as possible.

The benchmark S&P/ASX200 index was down 7.3 points or 0.16% to 4532.8 at 12.00 AEST. The Australian dollar also moved higher to US91 after the Fed’s announcement.

NAB shares increased 0.1% to $28.17, while Commonwealth Bank shares also moved 0.5% higher to $51.65. ANZ lost 3% to $22.05, as AMP also fell 1.9% to $5.77.

Meanwhile, new figures from the Australian Bureau of Statistics show the balance on goods and services during September was a deficit of $1.8 billion, an increase of 12%.

In seasonally adjusted terms, goods and services credits rose 5% to $20 billion, none-monetary gold rose $538 million or 64%, non-rural goods rose 2%, while rural goods fell $74 million or 3%.

Additionally, goods and services debits increased by 5% to $22 billion, with intermediate and other merchandise goods rising 10% or $656 million. Non-monetary gold rose $182 million or 33%, while capital goods and services debts rose 2% and 1% respectively.

Lion Nathan, the country’s second largest brewer, has reported a 13% rise in full year profit to $313 million supported by an increase in sales of premium beers. The group had previously forecast net profit of between $305-$315 million.

The company, which was bought out by Japanese company Kirin Holdings earlier this year, said the beer market has returned to health, but the wine business is continuing to struggle.

Leighton’s first quarter revenue up 10%

Leighton Holdings has recorded a 10% rise in first quarter revenue to $4.5 billion, with an update to its full-year net profit forecast to $600 million. Chairman David Mortimer said the mining contractor company has continued to perform well due to a number of stimulus packages being rolled out across the world.

“A decline in some of the Group’s core markets has been countered by significant spending by governments to stimulate economic activity both in Australia and overseas,” Mortimer said.

“For the 2010 financial year, the group is confident that revenue will exceed $19 billion and expects a net profit after tax of around $600 million, subject to any further asset impairments.”

In the US, stocks recorded just marginal gains after the Federal Reserve reiterated its decision to keep interest rates as close to 0% as long as possible. The Dow Jones industrial average gained 30.23 points, or 0.31%, to 9,802.14.

But analysts were encouraged by new data from the US Institute for Supply Management, which showed the services sector continued to grow for a second consecutive month in October.