David Jones third-quarter sales hit by slower consumer spending

Retailer David Jones this morning conceded consumer spending had slowed as it unveiled third-quarter sales revenue growth of 3.8%.

Sales revenue for the three months to 26 April was $453.3 million, from $436.7 million a year earlier. Sales growth in the same quarter of the previous year had been 8.4%.

David Jones reaffirmed its forecast of 8 to 13% profit growth in the second half.

In March, when the retailer released its first-half profits, it said it was trading at the top end of its guidance for like-for-like sales growth of 1% to 2%.

The retailer’s core categories of womenswear, menswear, cosmetics, footwear and accessories contined to trade well, but a softening in consumer spending was evident in the big ticket categories of electricals, furniture and homewares.

David Jones’ CEO, Mark McInnes, said the retailer’s third quarter 2008 sales performance reflected the slowdown in consumer spending that the company had anticipated and had started to plan for more than 18 months ago.

“Our business is in good shape and we are well prepared for the expected continuing environment of softer consumer demand,” McInnes said.

He said the company had benefited from new store openings at Burwood (Sydney) and Chermside (Brisbane) and from a refurbishment program (QueensPlaza, Brisbane) which had helped bolster sales in a subdued economic climate.

All states showed a slowdown in sales growth with the best performing states being Queensland and Victoria.

Inside Retailing

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