David Jones Slumps After Sales Drop to Record Low: Sydney Mover - Bloomberg

David Jones Ltd. (DJS), Australia’s second-largest department store company, slumped the most in six months after warm winter weather and intensifying competition helped drive quarterly sales to a six-year low.

The stock fell 4.3 percent to A$2.47 at 10:04 a.m. in Sydney trading, headed for its biggest decline since Nov. 21. Sales in the three months ended April 27 dropped 2.2 percent from a year earlier to A$391 million ($377 million), David Jones said in a statement today, the lowest since the Sydney-based company began reporting quarterly figures in 2006.

Weak consumer sentiment has depressed sales at Australian retailers and the currency’s strength has stoked online shopping from overseas stores, leading competitors to reduce prices. Third-quarter sales from David Jones stores open at least 12 months dropped 3.4 percent, compared with a 1 percent drop expected, based on the median of five analyst estimates compiled by Bloomberg News.

While the ongoing depth and breadth of price cuts in the industry isn’t sustainable, “in the short term, we expect to see heavy discounting as other retailers attempt to address excess winter inventory,” Chief Executive Officer Paul Zahra said in the statement.

Myer Holdings Ltd. (MYR), the country’s largest department store company, said last week that quarterly sales from stores open at least 12 months were up 0.4 percent. Wesfarmers Ltd. (WES) dropped the most in two years on May 17 after forecasting that earnings at its Target unit, the country’s largest department store chain, would fall as much as 43 percent this fiscal year.

Wesfarmers shares dropped as much as 1.8 percent and Myer declined as much as 2.8 percent today.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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David Jones Slumps After Sales Drop to Record Low

A customer browses shoes inside David Jones Ltd.'s Elizabeth Street store in Sydney.

A customer browses shoes inside David Jones Ltd.'s Elizabeth Street store in Sydney. Photographer: Ian Waldie/Bloomberg