What Happened to Myer Holdings Ltd’s Share Price?
Shares in retailer Myer Holdings Ltd [ASX:MYR] sold off again in a soft session for the stock market today. Myer closed down by nearly 1%…coming hot on the heels of two disastrous days for the share price. The past three days’ price action has wiped more than 19% off the Myer Holdings Ltd share price. The stock is now hovering at $2.00, which looks like a psychological support level.
Why Did This Happen to MYR Shares?
Myer’s weak result for the year ending 26 July 2014 sparked this multi-day selloff. Net profit after tax, at $98.5 million, deteriorated by nearly 23% relative to the previous year.
The market has reacted vehemently to Myer CEO Bernie Brookes’ insistence that the soft result is not his fault. Mr Brookes sheeted the blame to unfavourable weather and poor consumer sentiment…but after several years of lacklustre performance, and with the competitive environment getting tougher with the entry of more foreign retailers…investors understandably lost patience.
What’s more, many investors hold Myer shares for its dividend yield. Management trimmed the dividend last week, so these investors likewise have trimmed their holdings.
That’s why last week’s selling spree continued into today for Myer shares.
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What Now for Myer Holdings Ltd?
Myer needs an overhaul to have any hope of generating shareholder value. The company was late to the game on online retail and its earnings have shrunk now for four years in a row.
With local competitor David Jones Ltd now in the hands of a stronger international player, it’s distinctly possible that Myer may spiral to a similar fate. It would take a brave investor to hold on to Myer shares in this environment.
Cheers, Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
Join Money Morning on Google+
The post Why the Myer Holdings Ltd Share Price Fell Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
