Australia's David Jones stands by FY net profit growth forecast of 8-13 percent

Australia's David Jones stands by FY net profit growth forecast of 8-13 percent

	Published : Thu, 29 Nov 2007 01:27 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Australian upmarket department store operator David Jones Ltd reiterated on Thursday its forecast of underlying net profit growth of 8-13 percent in the fiscal year to July 2008, with demand for clothes, cosmetics and home wares expected to remain strong.

David Jones chief executive Mark McInnes said independent economic forecaster Access Economics is expecting retail spending to continue strengthening in 2008 because of robust economic growth.

'The market conditions we have experienced at the start of fiscal 2008 are in line with this forecast and we are well positioned to capitalize on the expected strong consumer sentiment throughout calendar 2008,' McInnes told shareholders at the company's annual general meeting.

David Jones reported a 9.7 percent increase in sales for the three months to Oct 27. Underlying net profit for the fiscal year to July 2007 surged 35 percent to 109.5 million Australian dollars.

McInnes said earnings in the year to July 2008 will be boosted by a full year of trading at its new stores in the Sydney suburb of Burwood and the Brisbane suburb of Chermside.

David Jones is also on track to open a store at QueensPlaza shopping center in the heart of Brisbane in early 2008.

McInnes said David Jones is benefiting from the overhaul of the Australian department store sector after Coles Group sold the Myer department store chain in the middle of last year.

Before the sale, David Jones was locked out of some shopping centers because Coles also owned discount department stores Kmart and Target which put it in a strong negotiating position with shopping center landlords.

Coles has recently been taken over by industrial conglomerate Wesfarmers Ltd.

'Since that time David Jones has entered into three new store leases -- with Westfield at Burwood, New South Wales; Chermside, Queensland; and Doncaster, Victoria; as well as adding a number of new brands to our portfolio,' McInnes said.

(1 US dollar = 1.13 Australian dollars)

allison.jackson@thomson.com

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