Myer result to be hit by cost headwinds

By a staff reporter

Myer Holdings Ltd says its second half result will be hit by "cost headwinds", particularly from labour and occupancy, with the group cautious on outlook amid a difficult trading environment.

In a release to the Australian Securities Exchange, chairman Paul McClintock said retail market conditions continued to be compromised by global economic concerns and uncertainty around the September federal election.

"In the second half of 2013, we remain cautious about the trading environment but committed to pursuing opportunities to improve the business," he said.

"The result is expected to be impacted by the refurbishment of three of our top 20 stores as well as continued cost headwinds particularly in relation to labour and occupancy."

However, the group declined to provide detailed guidance for the full year.

Mr McClintock also reiterated the retailers struggle with the tax-free threshold for overseas sales.

"As a company, we continue to be frustrated by the duty and GST loophole that provides overseas online retailers with an advantage over local retailers," he said.

"The internet has changed traditional retail and it is critical that reforms keep pace to ensure Australian businesses remain competitive. We appreciate the interest of State governments as they seek to claim the GST revenue being lost to them as a result of online sales to overseas retailers and look for a solution to be expedited ahead of the Federal election"

Myer posted a modest lift in half-year profit which beat analyst expectations.

In the 26 weeks to January 26, Myer posted net profit of $87.923 million, a 0.7 per cent lift on the $87.3 million recorded in the previous corresponding period.

Myer was hit by a consumer backlash on social media last week after chief executive Bernie Brookes ssaid company profits would be hurt by an increase in the Medicare levy to help fund Labor's national disability scheme.

The trading update was released before the market open today. Myer shares last traded at $2.94

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