Australia's Myer Holdings Ltd said on Thursday store closures due to the COVID-19 pandemic led to a 13% drop in first-half sales, sending shares of the department store operator to a near two-month low.
The 120-year old retailer, an icon of the country's high street, said sales fell to A$1.40 billion ($1.09 billion) for the six months ended Jan. 25, from A$1.61 billion a year ago, as restrictions on movement particularly hit sales in metro cities such as Melbourne, Sydney and Brisbane.
Myer and other brick-and-mortar retailers have been among the hardest hit by the pandemic, and have had to depend on millions of dollars in government support.
While Australian retailers have benefited from an economic rebound late last year as the country eased curbs, Myer's results suggest it was still heavily dependent on government support to keep operations running.
Myer received A$51 million as part of the government's JobKeeper payment scheme aimed at supporting businesses significantly affected by the pandemic, and was also granted A$18 million in rent waivers related to store closures.
Its online sales, however, proved to be a bright spot as they surged 71%. They accounted for 21% of total sales, double of last year's share.
"Management did point out that they would continue to invest in online. That makes a lot of sense," said Johannes Faul, director of equity research, Australia & New Zealand, Morningstar.
"Longer term, the online channel in general will grow and the brick and mortar footprint will decline for Myer, while the sales will be reallocated to the online channel."
Profit attributable to shareholders for the period rose to A$43 million from A$24.4 million a year earlier, helped largely by benefits from the JobKeeper scheme and rent waivers.
The company did not declare a dividend, continuing a halt since 2018.
($1 = 1.2862 Australian dollars)
(Reporting by Arundhati Dutta and Nikhil Subba in Bengaluru; Editing by Amy Caren Daniel and Rashmi Aich)
