SYDNEY: Shares of Australian department store operator Myer Holdings Ltd fell more than 10% on Monday after the company warned that weaker consumer spending and economic uncertainty had significantly affected sales in recent months.
Myer shares dropped as much as 12%, reaching their lowest level since October 2020, after the retailer said consumer demand weakened sharply in June and July.
Why Did Myer Shares Drop?
Myer said discretionary spending was affected by several factors, including higher fuel prices linked to the Middle East conflict, three interest rate increases in 2026, slower household income growth, a weaker housing market and growing financial uncertainty among consumers.
The company said trading conditions during the second half of the financial year were volatile, with month-to-month changes reflecting weaker consumer confidence.
Total sales declined 5.5% in June and 4% in July compared with the previous month, according to preliminary company figures.
Myer said increased promotional activity designed to attract shoppers was not enough to offset the broader decline in consumer spending.
How Did Weak Consumer Demand Affect Myer’s Financial Performance?
Myer reported that preliminary fiscal 2026 total sales increased 0.3% on a pro forma basis, compared with 0.5% growth in fiscal 2025.
The company said weaker performance in its Beauty business and fashion chain Portmans offset gains in other categories.
Preliminary fiscal 2026 operating gross profit was estimated between A$1.60 billion ($1.12 billion) and A$1.61 billion ($1.13 billion), representing a decline of 2.1% to 2.5% on a pro forma basis.
Myer said the decline reflected higher-than-expected promotional activity as the retailer attempted to stimulate demand in a challenging consumer environment.
The company operates Myer Retail and Myer Apparel Brands, and its latest update highlights broader concerns facing Australian retailers as households adjust to higher costs and tighter financial conditions.