David Jones Exploration Update
2008-11-26 08:19:00+10:00
ASX AND MEDIA RELEASE For Immediate Distribution Page 1 of 4 26 November 2008 1Q09 PAT* IN LINE WITH GUIDANCE OF 5-10% GROWTH 1Q09 PAT* in line with guidance of 5-10% growth despite difficult trading environment. David Jones has issued similar announcements eight times before, most recently about 0 minutes ago on Thursday 08 May 2008. The announcement 'DJS - David Jones 1Q09 Sales Results' was issued to the ASX on Wednesday 26 November 2008. [Notice Type: Exploration Update]
2008-11-26 08:19:00+10:00
ASX AND MEDIA RELEASE For Immediate Distribution Page 1 of 4 26 November 2008 1Q09 PAT* IN LINE WITH GUIDANCE OF 5-10% GROWTH 1Q09 PAT* in line with guidance of 5-10% growth despite difficult trading environment. David Jones has issued similar announcements eight times before, most recently about 0 minutes ago on Thursday 08 May 2008. The announcement 'DJS - David Jones 1Q09 Sales Results' was issued to the ASX on Wednesday 26 November 2008. [Notice Type: Exploration Update]
DJS - David Jones 1Q09 Sales Results
Wednesday 26 Nov 2008
ASX AND MEDIA RELEASE For Immediate Distribution
Page 1 of 4 26 November 2008
1Q09 PAT* IN LINE WITH GUIDANCE OF 5-10% GROWTH
• • 1Q09 PAT* in line with guidance of 5-10% growth despite difficult trading environment. 1Q09 Sales were down 6.3% on 1Q08, in line with management’s expectations ($442.3 mil in 1Q09 vs. $471.9 mil in 1Q08). The business was well prepared to trade in this environment (Inventory was tightly managed & Cost Efficiency implementation program is well on track). Adjusted LFL 1Q09 Sales were –5.2% vs. 1Q08 (after excluding refurbishment disruption at the Bourke St store, which benefits from the EBIT protection payment). Further adjusting to take account of Sales disruption due to refurbishment at the Company’s key Elizabeth & Market Streets, Bondi Junction & Robina stores LFL Sales were –4.3%. The Company is well prepared to continue the David Jones tradition as the leading gift-giving destination throughout the important Christmas trading period & subsequent Clearance trading in 2Q09. The Company has planned for LFL Sales to be –7.5% for each of the next 3 quarters of FY09 (which is worse than was experienced in the 1990/91 recession). On this basis the Company reaffirms its guidance of 5-10% PAT growth in FY09. If conditions continue to deteriorate and trading continues below its budgeted LFL Sales level of –7.5%, then the Company will reconsider its FY09 PAT guidance. The Company has a strong Balance Sheet, low Debt levels, strong Cashflows, clean Inventory levels and an attractive Store portfolio – providing a strong foundation for the expected challenging environment over the upcoming months.
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David Jones Limited (DJS) today reported Total Sales Revenue of $442.3 million for the first quarter of the 2009 financial year (1Q09) being the period 27 July 2008 to 25 October 2008 (versus $471.9 million in 1Q08). This equates to a –6.3% change on 1Q08. Despite a challenging macro economic environment, the Company reported its 1Q09 Profit After Tax (PAT)* in line with its 5-10% PAT growth guidance. The Company was well prepared in terms of inventory and cost management and its balance sheet is well set to handle the current trading environment. On a like-for-like (LFL) basis Sales in 1Q09 versus 1Q08 were –6.1%. Adjusting for refurbishment disruption due to the Bourke Street refurbishment, (which is due for completion in November 2009), LFL Sales were –5.2% compared to 1Q08. Further adjusting for disruption to sales due to refurbishments at the Company’s key Elizabeth and Market Street, Bondi Junction and Robina stores, LFL Sales were –4.3% versus 1Q08. In the case of the Bourke Street and Robina store refurbishments the Company will benefit from EBIT protection payments that cover the impact of the sales disruption whilst these stores
David Jones Limited A.C.N. 000 074 573 A.B.N. 75 000 074 573
ASX Release 1Q09 Sales 26 Nov '08.doc
2/08/2006 12:06 PM
ASX AND MEDIA RELEASE
Page 2 of 4
are being refurbished. Importantly, in terms of 2Q09 the Elizabeth Street, Market Street, Bondi Junction and Robina store refurbishments have been completed in time for Christmas trading. This means the disruption to trade experienced by these stores in 1Q09 will not be repeated in 2Q09 and David Jones customers will, throughout the critical Christmas trading period, enjoy an unparalleled shopping experience in these stores (which are amongst the best performing in the portfolio). David Jones CEO Mr Mark McInnes said, “Throughout the up-cycle in 2006 and 2007 we ensured we prepared for the downturn that was expected in late FY08 and FY09. As such, our trading in 1Q09 was in line with our expectations and we were extremely well prepared for this environment. “In 2Q09 we will continue the David Jones tradition of being the leading gift-giving destination for the important Christmas trading and the subsequent Clearance period. We have an inherent advantage at this time of year as we enjoy the status of a ‘one-stop’ shop, with the broadest selection of gifts for everyone. Over the last 10 years we have built the best national and international brand portfolio in Australia. Despite the challenging macro environment, we are confident we can meet all of our customers Christmas needs,” Mr McInnes said. FY09 – FY12 STRATEGIC PLAN UPDATE The Company has made significant progress in implementing its FY09 – FY12 Strategic Plan. The new David Jones American Express card was successfully launched on 30 September 2008, in time for the preChristmas 2008 trading period. On 18 October 2008 the new Doncaster David Jones store officially opened, as part of the $600 million Westfield redevelopment. Customers have embraced the new store and it is to date performing well. Added to this, the Company has completed its strategic refurbishments of: the upper floors of the Sydney CBD Elizabeth and Market Street stores; the Bondi Junction (Sydney) store; and the Robina (Gold Coast, Qld) store, all in time for Christmas trading. In addition, the Company announced on 25 November 2008 that it had entered into a Property Agreement that would deliver: 1. 3 new stores in high growth, attractive demographic centres (Pacific Fair - Qld, Macquarie - NSW and Whitford - WA); and 2. 3 new strategic refurbishments of high value stores (Kotara - NSW, Marion - SA and Karrinyup WA); OUTLOOK Looking forward, the Company expects difficult retail conditions for the remainder of FY09. Mr McInnes said, “Despite this outlook our business is well prepared. We have set our trading budgets for FY09 at worse than the experience of the department store sector in 1990/91, where the market experienced four negative quarters ranging from –3% to –6% per quarter. We have set our internal LFL Sales budgets predicting levels of –7.5% for the remainder of FY09, which is at a worse level than seen in the 1990/91 recession. “We have set our business parameters accordingly. Our Inventory has been tightly managed, our Cost Efficiency Programs are on track to deliver the savings required in this type ...
Wednesday 26 Nov 2008
ASX AND MEDIA RELEASE For Immediate Distribution
Page 1 of 4 26 November 2008
1Q09 PAT* IN LINE WITH GUIDANCE OF 5-10% GROWTH
• • 1Q09 PAT* in line with guidance of 5-10% growth despite difficult trading environment. 1Q09 Sales were down 6.3% on 1Q08, in line with management’s expectations ($442.3 mil in 1Q09 vs. $471.9 mil in 1Q08). The business was well prepared to trade in this environment (Inventory was tightly managed & Cost Efficiency implementation program is well on track). Adjusted LFL 1Q09 Sales were –5.2% vs. 1Q08 (after excluding refurbishment disruption at the Bourke St store, which benefits from the EBIT protection payment). Further adjusting to take account of Sales disruption due to refurbishment at the Company’s key Elizabeth & Market Streets, Bondi Junction & Robina stores LFL Sales were –4.3%. The Company is well prepared to continue the David Jones tradition as the leading gift-giving destination throughout the important Christmas trading period & subsequent Clearance trading in 2Q09. The Company has planned for LFL Sales to be –7.5% for each of the next 3 quarters of FY09 (which is worse than was experienced in the 1990/91 recession). On this basis the Company reaffirms its guidance of 5-10% PAT growth in FY09. If conditions continue to deteriorate and trading continues below its budgeted LFL Sales level of –7.5%, then the Company will reconsider its FY09 PAT guidance. The Company has a strong Balance Sheet, low Debt levels, strong Cashflows, clean Inventory levels and an attractive Store portfolio – providing a strong foundation for the expected challenging environment over the upcoming months.
• •
•
•
• •
David Jones Limited (DJS) today reported Total Sales Revenue of $442.3 million for the first quarter of the 2009 financial year (1Q09) being the period 27 July 2008 to 25 October 2008 (versus $471.9 million in 1Q08). This equates to a –6.3% change on 1Q08. Despite a challenging macro economic environment, the Company reported its 1Q09 Profit After Tax (PAT)* in line with its 5-10% PAT growth guidance. The Company was well prepared in terms of inventory and cost management and its balance sheet is well set to handle the current trading environment. On a like-for-like (LFL) basis Sales in 1Q09 versus 1Q08 were –6.1%. Adjusting for refurbishment disruption due to the Bourke Street refurbishment, (which is due for completion in November 2009), LFL Sales were –5.2% compared to 1Q08. Further adjusting for disruption to sales due to refurbishments at the Company’s key Elizabeth and Market Street, Bondi Junction and Robina stores, LFL Sales were –4.3% versus 1Q08. In the case of the Bourke Street and Robina store refurbishments the Company will benefit from EBIT protection payments that cover the impact of the sales disruption whilst these stores
David Jones Limited A.C.N. 000 074 573 A.B.N. 75 000 074 573
ASX Release 1Q09 Sales 26 Nov '08.doc
2/08/2006 12:06 PM
ASX AND MEDIA RELEASE
Page 2 of 4
are being refurbished. Importantly, in terms of 2Q09 the Elizabeth Street, Market Street, Bondi Junction and Robina store refurbishments have been completed in time for Christmas trading. This means the disruption to trade experienced by these stores in 1Q09 will not be repeated in 2Q09 and David Jones customers will, throughout the critical Christmas trading period, enjoy an unparalleled shopping experience in these stores (which are amongst the best performing in the portfolio). David Jones CEO Mr Mark McInnes said, “Throughout the up-cycle in 2006 and 2007 we ensured we prepared for the downturn that was expected in late FY08 and FY09. As such, our trading in 1Q09 was in line with our expectations and we were extremely well prepared for this environment. “In 2Q09 we will continue the David Jones tradition of being the leading gift-giving destination for the important Christmas trading and the subsequent Clearance period. We have an inherent advantage at this time of year as we enjoy the status of a ‘one-stop’ shop, with the broadest selection of gifts for everyone. Over the last 10 years we have built the best national and international brand portfolio in Australia. Despite the challenging macro environment, we are confident we can meet all of our customers Christmas needs,” Mr McInnes said. FY09 – FY12 STRATEGIC PLAN UPDATE The Company has made significant progress in implementing its FY09 – FY12 Strategic Plan. The new David Jones American Express card was successfully launched on 30 September 2008, in time for the preChristmas 2008 trading period. On 18 October 2008 the new Doncaster David Jones store officially opened, as part of the $600 million Westfield redevelopment. Customers have embraced the new store and it is to date performing well. Added to this, the Company has completed its strategic refurbishments of: the upper floors of the Sydney CBD Elizabeth and Market Street stores; the Bondi Junction (Sydney) store; and the Robina (Gold Coast, Qld) store, all in time for Christmas trading. In addition, the Company announced on 25 November 2008 that it had entered into a Property Agreement that would deliver: 1. 3 new stores in high growth, attractive demographic centres (Pacific Fair - Qld, Macquarie - NSW and Whitford - WA); and 2. 3 new strategic refurbishments of high value stores (Kotara - NSW, Marion - SA and Karrinyup WA); OUTLOOK Looking forward, the Company expects difficult retail conditions for the remainder of FY09. Mr McInnes said, “Despite this outlook our business is well prepared. We have set our trading budgets for FY09 at worse than the experience of the department store sector in 1990/91, where the market experienced four negative quarters ranging from –3% to –6% per quarter. We have set our internal LFL Sales budgets predicting levels of –7.5% for the remainder of FY09, which is at a worse level than seen in the 1990/91 recession. “We have set our business parameters accordingly. Our Inventory has been tightly managed, our Cost Efficiency Programs are on track to deliver the savings required in this type ...
