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Myer (ASX:MYR) share price up 21% amid strong half year result and first dividend since FY17

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The Myer Holdings Ltd (ASX: MYR) share price is on fire on Thursday morning.

In morning trade, the department store operator’s shares are up 21% to 49.5 cents after investors responded positively to its half year results release.

Myer share price jumps amid solid growth and dividend return

Total sales growth of 8.5% to $1,517.4 million
Comparable store sales growth of 17.8%
Online sales growth of 47.5% to $424.1 million, now representing 27.9% of total sales
Operating gross profit growth of 7.8% to $582.2 million
Net profit after tax up 55.2% to $32.3 million (excluding JobKeeper)
Statutory net profit after tax down 24.9% to $32.3 million
First dividend declared since FY 2017 with fully franked 1.5 cents per share interim dividend
Net cash up $16 million to $217 million

What happened during the first half?

For the six months ended 29 January, Myer delivered an 8.5% increase in sales to $1,517.4 million. This was driven by strong growth from its online business, which reported a 47.5% increase in sales to $424.1 million. This side of the business now accounts for approximately 28% of total sales.

Things were even better on the bottom line if you exclude the JobKeeper payments the company received in the prior corresponding period. Excluding these payments, Myer’s net profit after tax rose 55.2% to $32.3 million.

In light of this and its improving cash position, Myer has elected to pay its first dividend since FY 2017. It will be paying shareholders a fully franked 1.5 cents per share interim dividend.

Management commentary

Myer’s CEO, John King, said: “The half year results we have announced today demonstrate the strength and resilience of the business providing continued momentum for future growth.”

“The combination of our online platform and store network performed well in navigating the challenges faced during the period including disruptions caused by government-mandated lockdowns to mid-October, the emergence of Omicron in late December, and the mitigation of major supply chain disruption and staffing availability in early 2022.”

“Myer will pay a dividend for the first time in four years, demonstrating our confidence in the momentum being built as we move into the second half, with a return to sales growth in the first five weeks of second half with trade up 15.2% and a strong platform of future initiatives that are yet to be delivered as part of the Customer First Plan,” he added.

Trading update

Also potentially giving the Myer share price a boost today is the company’s update on trading so far in the second half.

It advised that during the first five trading weeks of the second half, it has seen a strong return to growth in stores and online. Myer sales are up 15.2%, with store sales up 9.3% and online up 48.6%.

Mr King said: “Despite the initial impact of Omicron in early January, we have returned to a growth trajectory – delivering 15.2% sales growth in the first five weeks of trade in the second half across both stores and online.”

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