While Myer's sales have exceeded expectations, its profits have fallen harder than the reputation of Fyre Festival.
👉 Background: Myer is one of the OG retail stores in Australia. By the late 2000's, Myer listed on the ASX with a market cap of more than $2.5 billion.Jennifer Hawkins was their brand ambassador and life was good!
👉 What happened: But since then, there have been a fair few twists and turns for the Myer brand. In fact, in early 2020, Myer was worth just $220 million. But now, Myer has updated its trading performance for the 2023 financial year with mixed results.
👉 What else: While sales have exceeded expectations, its profits have fallen harder than the reputation of Fyre Festival. And this might be good for customers, but not so good for investors.
💡Higher sales don’t always mean higher profits. While sales and profit are very closely linked, they are distinct measures of a company's performance.
💡In the case of Myer, it was able to drive up sales to over $3.3 billion for the 12-month period, but its profit expectations between $69 - $73 million. This was well below expectations of an $87 million full-year profit.
💡Investors like to see revenue growth, but ultimately want to see the profit grow at the same rate, if not faster than revenue. And for this reason, Myer's share price got whacked 14% after sharing this news.
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