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March 6 (Reuters) - Australia's biggest department store operator Myer Holdings MYR.AX on Wednesday reported a first half profit, as a cost-cutting drive and efforts to prop up online sales began to show results.
Net profit came in at A$38.4 million ($27.20 million) for the six months to Jan. 26, compared to a loss of A$476.2 million for the same period a year earlier.
Total sales fell 2.8 percent during the period to A$1.67 billion.
"For the next period, we will be continuing to improve the online experience, better matching the store range, including concessions, and making further improvements to fulfilment," Chief Executive Officer John King said.
However, the company expects its sales for the second half of the financial year to be impacted by the exit of a number of brands, while it also expects higher interest and depreciation costs to continue.
Myer, much like its brick and mortar peers around the world, is struggling to cope with cut-throat competition from online retailing behemoth Amazon.com Inc AMZN.O and fast fashion rivals like H & M Hennes & Mauritz AB HMb.ST .
The embattled retailer's plight has been exacerbated by the sharpest property downturn in a generation which has hit consumer spending, leading to a drop in earnings for companies across the sector.
The dire conditions have prompted many investors to bet against the Sydney-based firm, with Myer being the ninth most shorted stock among nearly 500 in Australia on Feb. 25, according to data https://asic.gov.au/Reports/Daily/2019/02/RR20190225-001-SSDailyAggShortPos.pdf on the Australian Securities and Investments Commission website.
The 119-year old firm declared no interim dividend after suspending it last year.
Excluding one-off items, Myer posted an underlying net profit of A$41.3 million, compared to a profit of A$40.1 million in the previous corresponding period. ($1 = 1.4116 Australian dollars)