THE DISTILLERY: Myer revival

The commentariat loves a good turnaround tale, and at first blush Myer's profit pickup fits the narrative. But there appears to be more to the story.

The Australian Financial Review's Chanticleer columnist, Tony Boyd, says doomsayers were too quick to write off the retailer. He sees promise in yesterday's numbers, as well as the retailer's investment in online sales.

"Those writing the obituary for the death of the department store will have to hold off for the time being, judging from the latest annual profit results for Myer. Chief executive Bernie Brookes refuses to give profit guidance but it would appear that the worst is over for a company that delivered five successive years of profit growth up to 2010, then went backwards."

At Fairfax, Malcolm Maiden thinks the turning point came in May of 2012, when Brookes issued a his last profit downgrade.

"Myer has reported three consecutive quarterly sales increases since the earnings downgrade last year. That's the best run since 2006, after TPG bought the group from Coles for $1.4 billion. And while sales growth is still modest, it accelerated from 0.8 per cent to 1.4 per cent in the past two quarters."

But while retail conditions are stabilising, Business Spectator's Stephen Bartholomeusz notes they're sitting well below previous highs.

"The base for comparison of today’s $87.9 million interim profit is the same half of 2011-12, where the profit was nearly 20 per cent lower than the previous corresponding half…The Myer numbers today, which ignited its share price, add to the sense that the sector has bottomed, albeit at relatively low levels and with only modest and heavily qualified expectations for the second half of the year."

Another set of numbers to win jotters' attention is the February jobs report, showing that a surge in employment kept the jobless rate steady at 5.4 per cent.

The Age's economics editor, Tim Colebatch, urges caution:

"Every month the Bureau of Statistics changes one-eighth of the households it surveys. In February the new households sampled turned out to be an unusual group, with a very high number of them in work. That change in sample alone accounted for roughly half the growth in employment. The Bureau keeps telling us to stop focusing on the seasonally adjusted figures. Its best information on what is really happening in the labour market is in its trend estimates. For months, the trend figures have told us that the labour market was really stronger than the seasonally adjusted imply. Now they warn us that it’s not as strong as February’s headline figure implies."

If the numbers are confirmed in the months ahead, though, his Fairfax colleague Adele Ferguson sees a big change in the rates debate.

"The housing market is recovering, house prices are rising, consumer and business sentiment is improving and equity markets are up more than 20 per cent in the past six months, all of which is lifting the country's retirement savings. Not surprisingly, bond yields jumped, which is the market's way of saying it does not believe the Reserve Bank is in the mood to do an easing any time soon. If unemployment falls below 5 per cent and inflation starts to rear its head the Reserve Bank will start looking at putting up rates."

Meanwhile, The Australian is giving the government yet another belting over its package of media reforms.

Bryan Frith is most overt in his takedown of the proposed public interest test for media mergers, which he thinks run the risk of reducing diversity by placing more pressure on an already struggling sector.

"In the unlikely event that parliament passes the bills the Coalition has vowed it would repeal the legislation if, as is currently odds-on, it wins the federal election. And that would be in the public interest."

Adam Crighton's lashing appears under the headline Free press a bulwark against state tyranny. He suggests the public interest test is "an Orwellian position better suited to Robespierre's France".

Finally, Bryan Frith moves on to supermarkets – the latest target in the government's "blitzkrieg of increased regulation". He argues a proposed code of conduct shows Gillard is hell-bent on "burying Australia in regulation before she is thrown out of office".