MELBOURNE, May 31 (Reuters) - David Jones, Australia’s No.2 department store chain, missed analyst forecasts with a 3.1 percent fall in third-quarter same-store sales but said the rate of decline had stabilised and reaffirmed earnings guidance.
David Jones, Australia’s No.2 department store chain, warned in March its full-year earnings could fall up to 40 percent as it invests in a costly overhaul of its strategy, adding service staff and beefing up its online offering, to try to turn around flagging sales.
Analysts had expected a fall of 1.9 percent in third quarter same-store sales, according to a Reuters survey.
“Looking forward to the fourth quarter we note that the first few weeks of the quarter have traded broadly in line with third-quarter trading patterns,” said David Jones Chief Executive Paul Zahra.
“We have consciously decreased the depth, breadth and volume of promotional activity,” he said.
The non-mining sectors of Australia’s economy are struggling under a strong currency, relatively high interest rates, falling home and share values and indebted consumers.
Australia’s biggest department store chain, Myer Holdings , last week cut its 2012 net profit guidance after a sharp decline in April and May sales.
Myer, which reported a 2.1 percent fall in third quarter same-store sales, gave a long list of headwinds, including higher day-to-day expenses for consumers, and worries about job security and the economy. Qantas Airways announced a further 500 job cuts a day earlier.
David Jones said total third-quarter sales, including new stores, fell 2.9 percent from a year earlier to A$399.8 million ($388.95 million).
Shares in David Jones closed at A$2.25 on Wednesday after hitting a 2012 low of A$2.16 last week.
$1 = 1.0279 Australian dollars Reporting by Miranda Maxwell; Editing by Richard Pullin