Full Year 2025 Myer Holdings Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Garth Francis - MST Marquee - Analyst : Good morning, guys. Thank you so much for taking my question. Just regarding the FY26 cost guidance being below, second half '25, so that was what, 30.5% of sales. In the pcp, it was 26.8%. Can you give us a sense, is that going to be closer to 30% or is that going to be somewhere in the midpoint of those just to get a sense of where that land?

Question: Garth Francis - MST Marquee - Analyst : Okay, terrific. Thank you. And then just the NDC, the cost you called out of $32 million to resolve that, is that all going to fall in '26, or is that spread a little bit over '27 because the resolution of that is planned for '27. And then when do we -- when can we expect that full $20 million run rate uplift from the resolution of the NDC issue?

Question: David Arrington - Bank of America - Analyst : Morning, Olivia. Morning, Kathy. Olivia, if you could go to slide 6, your sales overview, I find this quite an enlightening slide. It's quite encouraging, but there's areas there -- of areas there that you probably need to work on. If we start off with Apparel Brands, I was quite worried that you made trading update when I think you were down 3.9%. And you seem to have had a very good fourth quarter. Could you go into where, how, why, what drove that very strong fourth quarter, and what, it seems to be down in that first eight weeks. You're still --you're down 1.3%. My suspicion is Dotti is really dragging you down. So what are you going to do about that? Because, down 9% is the rest of the business looks pretty good. I thought I was really worried. I thought, oh God, soul sold as a puppy. But I thought, no, it looks, it's manageable. It's just Dotti. So what are you going to do about that? And the second part of that first question is on Myer looks pretty tidy. There's some areas there that you could need to improve, but Kathy's slide there, I think it slide 15, showed that Myer Exclusive Brands was down $11 million. And given the Strategy Day and conversations we've had, you've got to get Myer Exclusive Brands really wriggling along if you want to get your margin growth. So what are you going to do there in the next little while to get Myer Exclusive Brands going? So there's two parts of the question there -- three parts. What's going on with Apparel Brands, what's going on with Dotti, and then the Myer Exclusive Brands?

Question: David Arrington - Bank of America - Analyst : Okay. I think I've had more than the two questions, Olivia, so I'll follow up a few more afterwards. I've got a couple more, but I'll follow them up because I think I've had more than two.

Question: Chami Ratnapala - Bell Potter Securities Ltd - Analyst : Thank you. Good morning, Olivia, Kathy, and the team. Thanks for taking my questions. I think first one would be just expanding a bit on the categories from one of the earlier questions. I think beauty and home have outperformed in FY25. And for the first five weeks of FY26, the categories womenswear and home, if I believe, were noted. Are we seeing a bit of a category shift or maybe could you elaborate on where it's moving or which ones are out underperforming?

Question: Chami Ratnapala - Bell Potter Securities Ltd - Analyst : Perfect, thanks, Olivia. And the second one for me would be on online sales. That looks pretty high as well compared to the historic penetration that Myer Retail or Myer department stores have had on the marketplace contributing there, but what's the thinking? How much will penetration go up to or what's the thinking of on the channel makes sense?

Question: Chami Ratnapala - Bell Potter Securities Ltd - Analyst : That's great. Thank you very much.

Question: James Tracey - Blue Ocean Equities Pty Ltd - Analyst : Yeah. Good morning, Olivia, Kathy, and David. Yeah, thanks for giving that like-for-like sales goes 2.3%. It looks like there's a distinct acceleration if you look at -- if you compare that to the pro forma sales growth in '25 to the level that you've started FY26, could you provide a bit more detail on what's driving the acceleration? And just also in the context of that slide 6, you noted that the home category is growing more rapidly than in a long time. At the -- you mentioned that there's been a lot of work done around the product there, particularly Myer Exclusive Brands. Is this, I guess, evidence of the work that you've done bearing fruit, and is it a sort of a leading indicator of what could happen in other categories as you start to do more of that?

Question: James Tracey - Blue Ocean Equities Pty Ltd - Analyst : Yeah, that's good. That's very helpful. Thank you, Olivia. And question around the guidance you've given. A reduction in the cost of doing business is the percentage of sales. It looks like a significant improvement versus last year. It looks like pro forma. Cost of doing business went up around 130 basis points in FY25, so it's a big swing there. Can you comment on expectations around gross margins? If you back out the NDC costs, it looks like gross margins would have been flat to slightly up as well. So what's your view on sort of gross margins and I guess, EBIT margins for FY26? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 22, 2025 / 11:30PM, MYR.AX - Full Year 2025 Myer Holdings Ltd Earnings Call

Question: James Tracey - Blue Ocean Equities Pty Ltd - Analyst : Fantastic. Thank you, Olivia.

Question: Sam Haddad - Petro Capital - Analyst : Yeah, good morning. Just first question, just on the NDC, the remediation support cost in the second half is about $4 million that that you've quoted. Should we just extrapolate that into '26 in terms of the ongoing support costs for '26 around $8 million?

Question: Sam Haddad - Petro Capital - Analyst : Right, so '26, that $16 million becomes zero, that drag.

Question: Sam Haddad - Petro Capital - Analyst : Right. And just on the MEBs, you call that Strategy Day 400, 450 basis points in terms of product margin, opportunity once they launch in February. Is that -- does that even benefit? Is that over and above the $30 million of synergies with the Apparel Brands?

Question: Sam Haddad - Petro Capital - Analyst : Okay. And just going back to the cost of doing business, look at the Apparel Brands. it's obviously the main drag there on slide 23, 386--basis-point increase there. You sort of addressed this in one of the earlier questions that you're looking to focus on understanding the customer, turn around those sales. Just wanted to talk about store footprint. Are you still comfortable with the store footprint? Is there a tail end of stores that are sort of really dragging the chain that you might -- may reassess?

Question: Garth Francis - MST Marquee - Analyst : Good day. Thank you for taking a follow-up. Just a quick one on -- just a mix of concessions. Sounds like you've had some wins that have been publicized. Can you just maybe talk about what you're expected to see as part of the concession mix and whether there are any other changes for FY26 that we should be aware of?

Question: Garth Francis - MST Marquee - Analyst : Terrific. And then if I can just on the store network, I know you said that that was an ongoing discussion internally, but are you expecting to see you mentioned no refurbs for '26 Myer, but are you expecting to give up any store space in terms of your renewal?

Question: David Arrington - Bank of America - Analyst : Hi, Olivia. Hi, Kathy. Look, just a quick follow-up. There's a few concerns out there. I just wanted to have this cleared up. In the first half with Myer, your cost of doing business, you did a really good result. I think your cost of doing business in the first half, if I look at your slide, only increased by about $9 million. There seems to be a significant step up in the second half. Can you just give us a bit of comfort that there hasn't been a blowout in cost of doing business in that second half, or is that just you just did such a great job in that first half that you did -- because I noticed in that first half, you took $5 million out of operational cost savings. That didn't seem to come through in the full year. See, can you give us a bit of an update there because there is a bit of discussion out there on the operating cost of doing business in the Myer business. If you could do that, that'd be great.

Question: David Arrington - Bank of America - Analyst : How much do you reckon.

Question: David Arrington - Bank of America - Analyst : Right. That wasn't in the first half. That's second half. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 22, 2025 / 11:30PM, MYR.AX - Full Year 2025 Myer Holdings Ltd Earnings Call

Question: David Arrington - Bank of America - Analyst : That's important to know that, that's $11 million in the second half that wasn't in the first half. That's important. Sorry, I cut you off.

Question: David Arrington - Bank of America - Analyst : [Slide 16].

Question: David Arrington - Bank of America - Analyst : Yeah. Now, going into '26, that $11 million, that was all in the second half. That's probably what's going to keep it up a little bit for the '26 and then hopefully '27, not want to put words in your mouth, but we could probably expect that to start coming out or at least being worked more efficiently. Is that what you're doing? And then you're -- and then you -- can you give us -- and can you give a bit of sugar on this efficiency program that you're doing to do that?

Question: David Arrington - Bank of America - Analyst : Yeah. I think that's important -- sorry, Kathy.

Question: David Arrington - Bank of America - Analyst : As well as putting investment in a large chunk of that putting investment in to set the business up so it can grow into the future.

Question: David Arrington - Bank of America - Analyst : Yeah, and so we -- it's natural to expect an increasing cost of doing business and all power to you for OpEx-ing it, and I know another company that puts everything in CapEx if they can. But no, thank you for your great answers. I really appreciate it.