Tuesday, May 5, 2009

David Jones Sales Fall 9.2% on Australian Slowdown

David Jones Ltd., Australia’s second- biggest department store chain, said third-quarter sales fell 9.2 percent as consumers curbed spending on clothes and appliances.

Revenue fell to A$411.6 million ($305 million) in the three months ended April 25 from A$453.3 million a year earlier, Sydney-based David Jones said in a statement today. David Jones affirmed its forecast for second-half profit growth between zero and 5 percent.

Chief Executive Officer Mark McInnes, anticipating lower sales amid a recession, cut inventory holdings and renegotiated trading terms with suppliers to limit the impact on earnings of falling demand for designer fashions. The revenue decline eased in April as Australians began receiving cash handouts totaling A$12.2 billion from a federal government stimulus package.

“We recorded better-than-expected sales in April 2009 and in fact our trading was in line with April 2008,” McInnes said in the statement. “Our inventory has been tightly managed, our cost efficiency programs are all on track to deliver the savings we had planned.”

David Jones shares rose 8 cents, or 2.4 percent, to A$3.40 at 10:17 a.m. in Sydney, extending this year’s gain to 6.6 percent.

Nine-month sales fell 7.3 percent to A$1.47 billion.

Sales from stores open at least a year fell 11 percent in the third-quarter are down 8.7 percent so far this year.