http://au.biz.yahoo.com//070718/19/1bgyb.html
Wednesday July 18, 8:57 PM
UPDATE 1-Australia's David Jones upgrades profit outlook
(Adds details, shares)
SYDNEY, July 18 (Reuters) - Australian upmarket retailer
David Jones Ltd. (ASX: DJS.ax) revised up its earnings outlook on
Wednesday, saying sales had been boosted by a strong economic
environment and industry restructuring.
David Jones said it expected profit for the full year to
July 28, 2007, would grow by 32.6-34.2 percent, above analysts'
forecasts.
That compares with market forecasts of net profit after tax
of a 30 percent increase to A$105.5 million ($91.7 million),
according to a Reuters Estimates survey of eight analysts.
The upgrade pushed the department store chain's shares up
as much as 2.8 percent in early trading. David Jones last
traded up 1.3 percent at A$5.59.
The retailer said it now expects its second half profit to
come in at A$36.5 million to A$37.8 million, which would
represent growth of 37-42 percent on a year earlier.
That is sharply higher than the retailer's previous
forecast of second-half profit rising 8.5 percent to 13.5
percent.
Chief Executive Mark McInnes cited a strong economic
backdrop, the retailer's focus on brand names and the shifting
position of rival department store chain Myer as driving the
improved performance.
Australia's economy is in its 17th year of economic growth
and unemployment is near record lows.
Analysts say privately-held Myer's slight shift downmarket
means it is competing more directly now with discounters such
as Coles Group Ltd's CGJ.AX Target rather than David Jones.
David Jones said fourth-quarter sales revenue was expected
to be up 8 percent on a like-for-like basis, or 11 percent
including a new store, boosted by the winter discount sales.
"Trading through the fourth-quarter clearance has been
outstanding, delivering a 10 percent like-for-like increase,"
it said.
When David Jones reported robust sales for its third
quarter, it said it was too early to lift its conservative
profit guidance until it had traded through the fourth quarter.
The retailer is due to report fourth-quarter sales on Aug.
8 and full-year profits in late September.
($1=A$1.15)
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