Intense competition, bad weather and flooding makes for lower footfall across the retailer’s stores.
Retailing giant David Jones has released sales figures for Q2 covering October to January last, revealing a drop in sales and a relatively flat outlook for future growth.
Sales revenue of $617.6 million was recorded for Q2 2011 – a fall of 2.7 percent compared to the previous year’s figures for the same period, although this falls to 1.1 percent when the calendar is adjusted.
Sales for the Q1 of this financial year were $466.6m – a rise of 3.2 percent on the previous year.
No breakdown in the sales figures were given, although its electrical appliances division was also likely to be a casualty of falling figures considering the increasing use of online stores among consumers.
The company described consumer spending as “patchy”, citing heavy pre-Christmas discounting by retailers leading to “a very competitive retail environment, ” as well as the losses incurred by the Queensland floods among the mitigating factors.
However, guidance profit after tax for the first half of this year (H1) is still predicted to rise 5 percent and likewise predictions for H2 set for between 5-10 percent, but are now likely to “be at the lower end of this range,” DJ said in a statement.
However, the outlook remains somewhat gloomy at the retail giant, predicting future growth in sales this year to be flat.
“We experienced a challenging second quarter with wetter and cooler weather, decline in customer sentiment and significant discounting in the lead up to Christmas and the impact of the Queensland floods on six of our stores,” according to DJ CEO David Zahra.
“Consumer shopping behaviour continued to be patchy throughout 2Q11 and we have seen no material signs that this is changing.”
“Despite in 2Q11 with heavy promotional activity by retailers,we have managed our cost position well and I am pleased to report that we have also effectively managed our Gross Profit Margin and Inventory,” he said.
Expansion of its Perth Claremont Quarter with 85 percent more selling space, its Bourke Street Mall outlet in Melbourne CBD and the new Westfield Sydney centre were all cited as strong performers.