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* First half profit down 20 pct, misses forecasts for 15 pct drop
* Second quarter core sales down 1.7 pct
* Full-year sales may fall, Myer says
MELBOURNE, March 15 (Reuters) - Australia’s biggest department store chain, Myer Holdings, missed analyst forecasts with a 20 percent drop in first half profit, saying sales remained under pressure and were likely to fall this year.
Major retailers have been united in warning of a tough year as the non-mining sectors of Australia’s economy struggle under a strong currency, relatively high interest rates, falling home and share values and indebted consumers.
Australia’s economy grew just 0.4 percent in the fourth quarter while data on Wednesday showed consumer confidence fell sharply in March as households fretted about the outlook for employment and family finances.
Myer slightly tempered its forecast for flat sales this year, saying sales could be lower in 2012 unless the current sales trend improves.
“This result leaves the door open for more disappoint in the second half,” said Peter Esho, analyst at City Index, adding Myer’s full-year guidance was ambitious. “On our numbers this assumes a fair bit of improvement in trading for the second half.”
The retailer affirmed guidance for a decline in full year net profit of as much as 10 percent below 2011’s A$162.7 million ($169.9 million), assuming trading conditions don’t worsen.
Myer’s earnings fell 20 percent to A$87.3 million in the 26 weeks to Jan. 28, excluding one-off items.
Analysts had expected a 15 percent fall to A$92.5 million, according to the average of six forecasts.
Myer said it had seen improvement in trading between the first and second quarters, with a continuation of the second quarter trend into the third quarter.
Myer said like-for-like second-quarter sales, excluding new stores, fell 1.7 percent. Analysts had on average forecast a 1.9 percent fall in core second-quarter sales.
Myer Chief Executive Bernie Brookes said Myer would not to proceed with a planned new store at Watergardens in Victoria state as significant delays in led to Myer exercising its right to exit the agreement.
“In the current environment it is not unexpected that our discussions with landlords highlight adjustments in the timing of new stores,” Brookes said.
Shares in Myer closed Wednesday at A$2.37, up from January lows below A$2 but off highs above A$3.50 a year ago. ($1 = 0.9574 Australian dollars) (Reporting by Miranda Maxwell; Editing by Lincoln Feast)