Myer Holdings Limited (ASX: MYR) has released a preliminary trading update for the 2026 financial year showing total sales of $4,089 million, up 11.3% on an actual basis but facing significant headwinds from cost-of-living pressures and volatile consumer sentiment. The Australian department store and apparel retailer navigated challenging second-half trading by increasing promotional activity and executing strategic initiatives including a new retail media platform and marketplace expansion. Despite strong performance in specific categories and loyalty program growth, the company warned of continued caution regarding the near-term consumer outlook as macroeconomic pressures weighed on discretionary spending.
Key Points
- Myer Holdings Limited (ASX: MYR) is a major Australian retailer operating department stores under the Myer brand and apparel brands including Just Jeans, Marcs, sass & bide, and David Lawrence
- FY26 total sales reached $4,089 million, up 11.3% on an actual basis, with pro forma total sales up just 0.3% reflecting challenging consumer conditions
- Operating gross profit (OGP) estimated at approximately $1,601 million to $1,607 million, representing an increase of 13.8% to 14.3% on an actual basis but a decline of 2.1% to 2.5% on a pro forma basis
- Cost of doing business (CODB) percentage remained broadly in line with the FY26 target of approximately 29% despite lower-than-expected total sales
- Active loyalty program members reached a record 5.3 million, up from 4.7 million in FY25, with record Myer Retail tag rate of 81.5%
- The company launched 37 new brands in Beauty, 29 across Womenswear and Menswear, and secured access to global brands including Fenty Beauty, La Mer, Guerlain, and GAP
- Full financial results expected in September 2026 following completion of annual audit and Board approval
Volatile Second-Half Trading Reflects Cost-of-Living Pressures and Weakening Consumer Sentiment
Myer Holdings’ second-half FY26 performance was characterised by significant month-to-month trading volatility, driven primarily by sustained cost-of-living pressures that pushed consumer sentiment to its lowest levels in recent times. The company identified multiple macroeconomic headwinds that constrained household budgets and discretionary spending, including inflationary effects from higher fuel prices arising from the Middle East conflict, three interest rate increases during calendar year 2026, slower household income growth, a weaker housing market, and broader financial uncertainties affecting many Australian households.
Trading conditions deteriorated particularly sharply in June and July 2026, despite a period of stronger recovery in May. These pressures were further compounded by warmer than average winter conditions across most of Australia’s major cities, which typically impacts seasonal apparel sales. In response to weak underlying consumer spending, Myer Group increased promotional activity to stimulate demand. While value creation initiatives and integration synergies provided some support to performance, management stated that these efforts were insufficient to offset the severe weakness in consumer discretionary spending during the period.
FY26 Sales Performance: Actual Versus Pro Forma Results Show Mixed Category Performance
Total sales for FY26 reached $4,089 million, representing an increase of 11.3% on an actual basis. However, this figure requires careful interpretation due to the comparative accounting treatment. The actual basis comparison includes 12 months of Myer Retail operations and six months of Myer Apparel Brands in FY25, compared to 12 months of both divisions in FY26, making like-for-like analysis more meaningful through pro forma figures. On a pro forma basis—which includes 12 months for both Myer Retail and Myer Apparel Brands in both years—total sales were up just 0.3%, indicating the true underlying trading environment was considerably more challenging than the actual basis headline suggests.
Performance varied significantly across product categories and business divisions. The company reported strong growth in Home, Womenswear and Kids categories, as well as strong growth in Marketplace and Concession sales. These gains were partially offset by lower sales in Beauty and Portmans. Myer Retail division achieved total sales growth of 0.7% with comparable sales up 1.0%, while Myer Apparel Brands pro forma total sales declined 1.3%, though comparable sales declined by a smaller margin of 0.3%. The group-wide comparable sales metric showed a modest increase of 0.7%, suggesting that despite challenging conditions, like-for-like store performance provided some resilience.
Operating Gross Profit Impacted by Higher Promotional Intensity and Margin Compression
Operating gross profit for FY26 is estimated to fall within a range of approximately $1,601 million to $1,607 million. On an actual basis, this represents an increase of 13.8% to 14.3% compared to FY25, reflecting the inclusion of a full year of Myer Apparel Brands results. However, on a pro forma basis—which provides a more meaningful year-on-year comparison—OGP declined by 2.1% to 2.5%, indicating underlying profitability compression. The company attributed this pro forma decline directly to higher than planned promotional activity undertaken to stimulate demand in the challenging consumer environment.
The OGP margin for FY26 is estimated at approximately 39.2% to 39.3% of total sales, compared to 38.3% on an actual FY25 basis and 40.3% on a pro forma FY25 basis. This margin compression on a pro forma basis reflects the intensified discounting strategy employed throughout the second half to drive customer traffic and maintain sales momentum. Despite the margin pressure, the company noted that cost of doing business (CODB) as a percentage of total sales remained broadly in line with its FY26 target of approximately 29%, representing effective cost management during a period of inflationary pressures and lower-than-expected sales volumes.
Record Loyalty Program Engagement and Customer Tag Rates Drive Strategic Growth
Myer Holdings achieved significant milestones in customer loyalty and engagement during FY26, positioning the company for potential competitive advantage in an increasingly challenging retail environment. Active members in the loyalty program reached a record 5.3 million at year-end, up from 4.7 million in FY25, representing growth of approximately 600,000 new or reactive members. More significantly, the company achieved record tag rates—the percentage of sales captured by loyalty members—with Myer Retail achieving 81.5% compared to 79.5% in FY25, while the Myer Apparel Brands achieved 55.2% within less than 12 months since the program’s launch across that division.
Supporting these loyalty metrics, Myer Group launched its Myer Media Network during FY26, powered by the MYER one retail media platform. This development reflects the industry-wide shift toward retail media as a revenue diversification opportunity and customer engagement tool, enabling the company to monetise first-party customer data and provide targeted advertising opportunities for brand partners. The strong growth in loyalty engagement suggests that customers are responding positively to the company’s value proposition and integrated customer experience across Myer Retail and Myer Apparel Brands divisions, despite the challenging consumer spending environment affecting transaction volumes.
Brand Expansion Strategy: 37 New Beauty and 29 New Fashion Brands Launched
Myer Holdings demonstrated continued commitment to brand expansion and product diversification during FY26, launching 37 new brands in the Beauty category and 29 new brands across Womenswear and Menswear divisions. These additions represent a substantial broadening of the company’s merchandise offer and reflect management’s strategic approach to differentiation and customer acquisition. The company also secured exclusive or expanded access to several globally recognised brands, including Fenty Beauty, La Mer, Guerlain, and GAP, which typically command strong customer demand and can serve as traffic-driving anchors within the retail environment.
These brand launches and acquisitions occurred despite the challenging trading environment and suggest management confidence that expanded product assortment and elevated brand prestige can support long-term customer acquisition and retention strategies. The focus on both mass-market and premium beauty brands, combined with key fashion brand partnerships, indicates a deliberate strategy to serve multiple customer segments and occasions. This multi-brand, multi-tier approach has historically provided resilience in retail downturns, as it offers flexibility in promotional strategy and customer targeting across different demographic and income groups.
Store Network Optimisation: Closures, Openings, Refurbishments, and Marketplace Launch
The company continued executing its store network optimisation program during FY26, which involved strategic closures and openings of Myer Apparel Brands locations, along with major refurbishment initiatives and marketplace expansion. In total, the company closed 38 Myer Apparel Brands stores while opening 14 new locations, representing a net reduction of 24 stores and reflecting continued portfolio rationalisation. The company commenced refurbishment of the Myer Sydney City beauty hall and upgrade of the Myer Morley location in Perth, suggesting selective investment in key market positions and category showcases.
A significant development during the period was the launch of a new Myer Marketplace platform in June 2026, which made available 25,000 new products and expanded brand partnerships beyond the traditional department store model. This omni-channel initiative allows the company to curate third-party merchandise without the capital and inventory requirements of traditional retail, improving economics while expanding customer choice. The company also extended the lease for Myer Roselands in Sydney until January 2027, securing continued operation at this location. Collectively, these network decisions reflect a detailed portfolio analysis aimed at optimising unit economics and competitive positioning in an increasingly challenging Australian retail landscape.
Value Creation Program and Integration Synergies Support Underlying Performance
Throughout FY26, Myer Holdings made substantial progress executing its value creation program and integration initiatives across the combined business. Specific value creation benefits achieved included the closure of the Myer Asia sourcing office, the closure of one overseas hub, the reorganisation of staffing flexibility in Myer Retail stores, and the restructuring of retail operations within the Myer Apparel Brands division. These initiatives were designed to optimise the operating cost structure and mitigate the impact of inflation and cost-of-living pressures on the broader consumer market. Management indicated that these value creation benefits partially offset CODB increases and inflation pressures, though they were ultimately insufficient to prevent pro forma operating gross profit decline.
Integration synergies were delivered from multiple sources, including the combination of Myer Apparel Brands with the broader Myer Group, which generated benefits from refinancing arrangements and initial procurement efficiencies. Additional synergies were achieved from the integration of sass & bide, Marcs, and David Lawrence into the consolidated group operations. While specific quantification of synergy benefits was not disclosed in the trading update, management emphasised that these combined value creation and integration initiatives have strengthened the business foundation and supported execution of the broader Myer Group Growth Strategy during challenging market conditions.
National Distribution Centre Proof-of-Concept Stage Addresses Long-Term Supply Chain Resilience
Myer Holdings continued progressing its National Distribution Centre (NDC) initiative during FY26, with operations remaining in the Proof-of-Concept Stage. This measured approach reflects management’s deliberate strategy to mitigate execution risk associated with implementing a long-term supply chain solution across a complex, multi-format retail operation. The NDC represents a significant capital and operational initiative, with the proof-of-concept phase allowing the company to test processes, systems integration, and performance metrics before committing to full-scale implementation and associated capital expenditure.
This cautious implementation approach is particularly important given the challenging macroeconomic environment and consumer spending constraints characterising the FY26 period. By extending the proof-of-concept phase, the company can avoid overcommitting capital resources during a period of retail volatility while simultaneously positioning itself to implement a more efficient supply chain once market conditions stabilise and consumer demand recovery becomes more evident. The NDC initiative, once fully implemented, is expected to support improved inventory management, faster product rotation, and enhanced omni-channel fulfilment capabilities across the Myer retail network.
Executive Perspective on Strategic Positioning and Near-Term Caution
Myer Group Executive Chair Olivia Wirth provided commentary on the FY26 trading environment and company strategy, acknowledging that the second half of the financial year proved significantly more challenging than both the first half of FY26 and the full FY25 period. Wirth noted that while the first four months of the second half showed mixed performance including a stronger May, a material downturn in consumer sentiment became evident, particularly in June and July, resulting in subdued consumer activity and weak discretionary spending. This characterisation of the trading environment provides important context for understanding both the sales performance and the promotional intensity employed to drive customer engagement.
Despite the challenging near-term conditions, Wirth expressed confidence in the strategic initiatives being executed, emphasising that the company has continued to strengthen the business through loyalty program improvements, brand and product expansion, retail media platform launch, store network optimisation, marketplace implementation, and value creation benefits. The executive statement indicates that while the company remains cautious regarding the near-term consumer outlook, management believes that current strategic actions are strengthening competitive position, building resilience, and supporting long-term shareholder value creation. This messaging suggests the company views current challenges as cyclical consumer headwinds rather than structural retail market deterioration.
Timeline for Full Financial Results and Investor Implications
Myer Holdings announced that full FY26 financial results will be released in September 2026, following completion of the annual statutory audit and Board approval of the accounts. The preliminary trading update provided in July 2026 represents an early disclosure of headline sales and profitability metrics, enabling investors and analysts to begin evaluating performance while final detailed results undergo verification and audit. The company noted that year-end results finalisation and verification has commenced, which will include assessment and measurement of any impairment and additional Significant Items required to finalise Statutory Net Profit After Tax (NPAT).
This phased disclosure approach provides transparency regarding the company’s expectations while preserving the formal audit process and ensuring complete accuracy of final statutory results. The mention of potential impairment assessment and significant items suggests management recognises that the challenging FY26 trading environment may necessitate accounting adjustments, particularly relating to asset valuations or one-off items associated with the integration of Myer Apparel Brands or value creation initiatives. Investors should anticipate additional detail regarding depreciation, amortisation, financing costs, tax position, and cash flow metrics when full results are released in September 2026.