Myer chief executive Bernie Brookes has criticised high wages costs and the GST as the department store’s full year profit fell by 8.7 per cent to $127.2 million.
Profit shrunk despite growth in sales revenue of nearly 1.0 per cent to $3.14 billion.
Costs blew out in the year to July 27, particularly in the second half, with Myer’s full year cost of doing business increasing by 3.1 per cent to $1.01 billion.
Those costs are expected to increase by another four to five per cent in the company’s 2013/14 fiscal year.
The company has called them “one-off costs” on store refurbishments that distort their underlying performance, but many in the investment community say these are normal investments that will always be needed.
Mr Brookes said Myer’s profit had also been impacted by cost pressures associated with labour and utilities, rates and taxes.
“Retail continues to be the biggest private employment sector in the country,” he said.
“All Australian retailers are being impacted by rising employment costs, escalating occupancy and utility costs, and a GST loophole providing an unfair advantage to foreign retailers.
“The sector would benefit from reform to help drive productivity and become more competitive in an increasingly global marketplace.”
Myer is cautious for the year ahead, given consumer confidence and retail sales are still modest.
More spending is also needed on its online initiatives, new stores and refurbishments.
The benefits of that spending are expected to begin in the following fiscal year, in 2014/15, when the online business becomes profitable after achieving $50 million in earnings, the company said.
IG market strategist Evan Lucas suggested Myer had tested the patience of investors for too long, asking for time to get its online operation and other business improvements implemented.
“There comes a point when you say enough is enough, you’ve had your chance and you haven’t delivered, what happens now?” he told AAP.
The company’s shares have risen by 30 per cent so far in 2013, but had dropped 8.5 cents, or 3.0 per cent, to $2.795 by 1410 AEST on Thursday.
Myer has also bought the remaining 35 per cent stake of clothing retailers Sass and Bide that it did not own for an estimated $9 million.
