Company  Overview

Myer Holdings (MYR) is Australia’s longest‑standing department‑store and apparel retail group, now reshaped into a lean, digitally‑enabled omni‑channel platform with renewed earnings momentum and strategic clarity. We regard Myer Holdings (ASX: MYR)as a rejuvenated Australian retail platform entering a structurally stronger phase following the successful integration of Myer Apparel Brands and the relaunch of its MYER one loyalty ecosystem. The 1H26 results confirm that Myer is executing with precision, delivering double‑digit sales growth, disciplined cost management, and record cash conversion despite a challenging discretionary‑spending backdrop.

With iconic brands such as Myer, Just Jeans, Portmans, Dotti, and sass & bide, the Group now operates across department‑store and specialty‑retail channels in Australia and New Zealand. Its omni‑channel network, enhanced by AI‑driven personalisation and a refreshed product mix, is translating into tangible earnings momentum and customer engagement.

1H26  Performance: Sales  Acceleration  and  Cash  Strength

Myer delivered a robust first‑half performance, underscoring the success of its growth strategy and integration execution.

Group sales rose 24.5 % to A$ 2,279.5 million, incorporating Myer Apparel Brands for the first time. On a pro‑forma basis, sales increased 2.1 %, driven by growth in Womenswear, Home, Concessions, and Just Jeans. Operating gross profit climbed 35.1 % to A$ 886.0 million, while underlying EBIT advanced 10.5 % to A$ 112.8 million.

Underlying NPAT reached A$ 51.7 million (+21.7 %), and statutory NPAT came in at A$ 40.3 million (+32.8 %), supported by higher EBIT and refinancing benefits. The Group declared a fully franked interim dividend of 1.5 cents per share, representing a 50.1 % payout ratio.

Operating cash flow surged to A$ 270.9 million, translating to 134 % cash conversion, and the balance sheet closed with net cash of A$ 287 million, providing ample flexibility for strategic investment and shareholder returns.

Strategic  Execution:  From  Transformation  to  Scalable  Growth

Myer’s transformation is anchored in four strategic levers: customer and loyalty, product and brand renewal, omni‑channel network optimisation, and supply‑chain efficiency.

1 - Customer  and  Loyalty

The revamped MYER one program has become a cornerstone of customer engagement, achieving a record tag rate of 80.9 % in Myer Retail and 51.3 % in Myer Apparel Brands within six months of launch. Active members expanded to 5.1 million (+8.5 % YoY), supported by new partnerships with CommBank, Velocity Frequent Flyer, and JD Sports. AI‑driven data modelling and content generation now enable personalisation at scale, enhancing conversion and basket size.

2 - Products  and  Brands

Myer launched 30 new beauty brands and 14 new fashion brands in 1H26, including Fenty Beauty, La Mer, GAP, and TOPSHOP, alongside a refreshed suite of Myer Exclusive Brands. These additions strengthen category leadership and drive margin resilience through higher‑value product mix.

The integration of Myer Apparel Brands is progressing ahead of schedule, with transitional services exited and synergies being realised. The Group targets A$ 30 million in annualised synergies from Apparel Brands and a further A$ 10 million from the integration of sass & bide, Marcs, and David Lawrence.

3 - Omni‑Channel  Network

Myer continues to optimise its store footprint while expanding digital reach. The Group closed 22 Apparel Brands stores and opened 12 new locations, including flagship investments in Myer Morley (Perth) and Myer Sydney City Beauty Hall. The Myer Marketplace platform, launching in May 2026, will broaden product range and accelerate online growth.

Online sales rose 18 % YoY, with 32 % of orders fulfilled via third‑party logistics and distribution centres, up from 13 % a year earlier, evidence of improved supply‑chain agility.

4 - Supply  Chain  and  Operational  Efficiency

The closure of the Myer Asia sourcing office and direct‑to‑factory sourcing model are delivering cost savings and faster turnaround times. The National Distribution Centre (NDC) proof‑of‑concept phase has mitigated execution risk and will underpin long‑term logistics efficiency.

Segment  Breakdown

Myer  Retail

Sales increased 2.4 % to A$ 1,875.2 million, supported by growth in Home, Womenswear, Menswear, and Concessions. Comparable sales rose 2.2 %, while online sales advanced 5.8 %, aided by 9.3 % growth in Marketplace. Operating gross profit edged up 0.3 %, with margins slightly lower due to promotional activity clearing legacy stock ahead of brand relaunch.

Myer Apparel  Brands

Sales reached A$ 404.3 million (+0.6 % pro forma), led by Just Jeans (+7.4 %). Operating gross profit was A$ 227.9 million, maintaining a robust 56.4 % margin. The segment result declined marginally (‑1.3 %) due to higher CODB, but integration synergies are expected to lift profitability in 2H26.

Financial  Strength: Liquidity and  Capital  Discipline

Myer’s balance sheet remains pristine. Cash rose to A$ 286.1 million, debt remained minimal at A$ 0.9 million, and inventory increased to A$ 528.7 million, supporting new brand launches and seasonal demand. Lease liabilities declined to A$ 1.54 billion, while net assets expanded to A$ 927.7 million.

The Group’s CODB ratio of 27.9 % sits comfortably within its FY26 target of ~29 %, reflecting disciplined cost control amid strategic investment.

Dividend Sustainability

The reinstated dividend underscores confidence in cash‑flow durability. With A$ 287 million net cash, strong free‑cash‑flow generation (A$ 247.8 million in 1H26), and a lean capital structure, Myer is well positioned to maintain shareholder returns while funding growth initiatives.

Valuation  and  Peer  Context

Peer	FY26 Sales (A$ bn)	EV/Revenue	Dividend Yield	Key Differentiator
Wesfarmers Ltd	~46.4	~2.5×	2.4%	Diversified retail portfolio
Premier Investments Ltd	~0.83	~2×	7%	Apparel focus with global brands
Myer Holdings Ltd	~3.4	~0.5×	~7% (INTERIM)	Integrated retail and apparel synergies

Myer trades at a remarkable discount to peers despite its improving fundamentals and strong cash generation. We believe a rerating toward 1.5–2× EV/REVENUE is achievable as integration synergies materialise and omni‑channel momentum accelerates.

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Catalysts

Delivery of FY26 CODB target (~29 %) and margin expansion

Successful launch of Myer Marketplace in May 2026

Realisation of A$ 40 million annualised synergies from integration

Continued growth in MYER one membership and data‑driven personalisation

Ongoing rollout of Myer Exclusive Brands and new global partnerships

Sustained free‑cash‑flow generation supporting dividend growth

Risks

Despite the strong execution momentum, several factors could temper near‑term performance:

1 - Consumer Spending Headwinds :Myer’s exposure to discretionary retail makes it sensitive to macroeconomic volatility. Persistent cost‑of‑living pressures and interest‑rate uncertainty could weigh on household spending, particularly in apparel and beauty categories.

2 - Integration Execution Risk :The full synergy capture from Myer Apparel Brands depends on seamless operational integration. Any delay in system consolidation, cultural alignment, or store rationalisation could defer cost savings and margin uplift.

3 - Competitive Intensity: The Australian retail landscape remains fiercely competitive, with global entrants and online‑only players exerting pricing pressure. Myer’s ability to sustain differentiation through exclusive brands and loyalty engagement will be critical.

4 - Supply‑Chain and Inventory Management :While the National Distribution Centre project mitigates long‑term risk, short‑term disruptions in logistics or sourcing could impact stock availability and working‑capital efficiency.

5 - Digital Execution and Technology Investment :The success of the new Marketplace and AI‑driven personalisation hinges on flawless digital execution. Any technical setbacks or cybersecurity incidents could affect customer trust and sales momentum.

Technical  Analysis  of Myer  Holdings (ASX: MYR)

Source: TradingView

Myer remains within a well-defined descending channel, so the broader trend is bearish despite the price attempting to stabilise near lower-channel support.

Stop Loss

A practical stop loss sits below 20.0 cents and the rising short-term support line. A daily close beneath this area would expose the channel’s lower boundary.

Price Levels

Immediate resistance is near 22.5 cents, followed by 25.5 cents and the descending channel ceiling. Support is around 20.5–21.0 cents.

Volume and RSI

Recent selling occurred with modest volume relative to earlier spikes, suggesting limited conviction. A recovery should be supported by materially higher turnover, particularly above 22.5 cents. RSI is near 34 after rebounding from oversold territory around 20. Momentum is improving, but a move above 40–50 is needed to support a durable recovery.

FAQs  about Myer  Holdings (ASX: MYR)

1 -  Does  Myer  pay  dividends?

Yes. The company declared a fully franked interim dividend of 1.5 cents per share, reflecting a 50 % payout ratio and confidence in its cash‑flow resilience.

2 - What  is  the  strategic  focus  for  FY26?

Driving omni‑channel expansion, deepening customer engagement through MYER one, and realising cost synergies from Apparel Brands integration.

3 - Why  does  Myer  trade  at  a  discount  to  peers?

Despite strong fundamentals, investor caution around discretionary retail and integration execution has kept valuation subdued. We expect this gap to narrow as synergies and digital growth materialise.

Company Overview

1H26 Performance: Sales Acceleration and Cash Strength

Strategic Execution: From Transformation to Scalable Growth

1 - Customer and Loyalty

2 - Products and Brands

3 - Omni‑Channel Network

4 - Supply Chain and Operational Efficiency

Segment Breakdown

Myer Retail

Myer Apparel Brands

Financial Strength: Liquidity and Capital Discipline

Dividend Sustainability

Valuation and Peer Context