Australian Retail Sales Rise 0.2%; Myer Drops 11.5%

Marcus Jacob
07 Feb, 2011
New York City

Australian stocks closed higher despite the weakness in retailers. Australian retail sales rose 0.2% in December and Myer estimated full year profit to declined 5%. JB Hi-Fi rose on the expectation of better second half earnings. Miners and energy companies declined tracking international prices.

[R]5:00 PM Sydney – Australian stocks closed higher despite the weakness in retailers. Australian retail sales rose 0.2% in December and Myer estimated full year profit to declined 5%. JB Hi-Fi rose on the expectation of better second half earnings. Miners and energy companies declined tracking international prices.[/R]

Stocks in Australia closed higher despite the weakness in retailers. Retailers edged down after Myers lowered earnings outlook and retail sales in the nation rose only 0.2% in December including holiday period.

The ASX 200 index rose 5.8 or 0.12% to 4,868.50 and the broader All Ordinaries index increased 5.5 to 4,964.30.

The Australian dollar declined to $1.036 and traded at 83.345 yen and 3-year bond edged lower to 94.66 and 10-year bond fell to 94.26.

Australian retail sales in December rose 0.2% to A$20.36 billion according to the Australian Bureau of Statistics. The increase was less than 0.5% rise expected by most economists.

Myers lowered its annual profit outlook by 5% and blamed the decline on weaker than expected consumer confidence. The retailer had earlier expected earnings to increase between 5% and 10% now expects the earnings to decline as much as 5%.

Among other things the retailer blamed the weather and rise in utilities and healthcare cost and noted that electronic sales were worst hit as television set prices declined and computer game console sales were poor.

Chief executive Bernie Brookes in a conference call after the earnings said that second half is likely to be challenging but did not revise his earnings outlook for 2012 and 2013.

Myer also agreed to pay 65% stake in the designer Sass & Bide for $42.25 million after the designer terminated its 10-year partnership with David Jones.

Stock Movers

Resource stocks closed mixed as commodities gyrated in New York and London on Friday. BHP Billiton declined 12 cents to A$46.55 and Rio Tinto Plc declined 54 cents to $85.86.

Oil Search increased 3 cents to A$6.63 and Origin rose 3 cents to A$16.60. Santos gained 10 cents to A$14.07 and Woodside fell 8 cents to A$42.25.

Westgold Resources decreased 3 cents to 29.5 cents after it said to make an offer for Aragon Resources for A$76 million. Aragon increased 3.5 cents to 14.58 cents.

Banks closed higher. ANZ increased 5 cents to A$24.24 and Commonwealth Bank increased 41 cents to A$53.47. Westpac added 15 cents to A$23.40 and National Australian Bank rose 15 cents to A$25.00.

Myer dropped 11.5% or 423 cents to A$3.32 and David Jones fell 20 cents to A$4.53. Harvey Norman dropped 11 cents to A$2.93. Woolworths declined 9 cents to A$26.65 and Wesfarmers rose 20 cents to A$34.03.

JB Hi-Fi rose 35 cents to A$19.43 on the expectations of higher profit for the full year. The retailer had reported first half profit of $A87.8 million.