Myer: Solid Sales Performance Against a Challenging Macro Backdrop

No-moat Myer’s underlying sales momentum improved slightly despite the cost-of-living crunch. Consumers are keeping spending up by saving much less than usual. However, we expect high demand levels for fashion items to normalize as the postpandemic boom peters out and the savings rate starts to creep up again. Both factors are formidable headwinds for consumer discretionary spending and Myer’s sales outlook. Despite marginally lifting our fiscal 2024 sales and earnings estimates, our fair value stands at AUD 0.75, close to current share prices.