David Jones (DJS) is a leading retailer with stores throughout Australia. The Group operates 36 department stores and 2 warehouse outlets.

DJS strategy is to deliver a differentiated product offering with strong and up-market brands. To facilitate store differentiation, DJS is focused on increasing the number of lines that are exclusive to David Jones. The company also markets its own private label as part of its merchandise brand mix.In June 2003 DJS announced a strategy review to refocus on core department stores. This restructure involved the exit from Foodchain (achieved June 03), repositioning the Online business (general merchandise ceased to be available online from July 2003) and a thorough review and assessment of the store portfolio.Credit card revenue complements the core department store revenue, and represents an area of growth for DJS. Core department store revenue growth is supported by ongoing store refurbishments. In response to a slowing retail environment DJS aims to maintain profit growth through their cost efficiency program and tight inventory management. The strategic review also put a $50 million cap on capital expenditure between FY04 and FY08.The balance street is strong and in March 2005 DJS said the capital management program would be announced in November 2005.David Jones reported NPAT of $52.89m for the 6 months to 29 January 2005, up 21.9% on the pcp. Sales revenue rose 5.5% to $977.7m. Department stores EBIT rose 19.7% to $59.6m on the back of an increase in the EBIT margin from 5.4% to 6.1%. Credit card EBIT rose 20.7% to $15.3m. The result was boosted by a strong retail environment and with cost efficiency targets ahead of schedule. The interim dividend declared was 6 cents fully franked, up from 5 cents fully franked. The company forecast FY05 NPAT growth at the top end of their 5% - 10% guidance.

30/07/04

Leading Index

ASX 200

Sector Index

Consumer Discretionary

Industry Group

Retailing