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DJs lifts profit forecast after surge in sales

David Jones chief executive Mark McInnes refused to be drawn into commenting on the tussle with the recently floated Myer, but said his store's premium growth rates for the first half and December quarter reflected David Jones' differentiation in the mind of consumers as well as its ability to eke out bigger profits from an upturn in the economy.

David Jones yesterday doubled its profit forecasts for the first and second halves of 2009-10, with Mr McInnes saying the business was in "terrific shape" after customers returned to its stores for women's footwear, manchester, gifts, appliances and cosmetics.

"The core categories of our business that deliver us the highest margin and the highest differentiation are the categories that were the strongest result [in the first half]," he said.

The retailer has increased its first-half profit guidance to 10 per cent growth, up from zero to 5 per cent previously, while second-half profit guidance for 2009-10 has been lifted to 5 to 10 per cent growth, against an earlier target of flat to 5 per cent.

Releasing its sales results for the six months to January 23, David Jones reported a 2.3 per cent lift from the previous comparable period, to $1.087 billion. On a like-for-like store basis, sales rose 2.2 per cent. In the second quarter of 2009-10, which includes Christmas, it had like-for-like sales growth of 3.1 per cent.

Myer last week stepped back from issuing a profit upgrade for the year after it released first-half figures showing slightly slimmer sales growth of 2.2 per cent, or 1.2 per cent on a like-for-like basis. Myer chief executive Bernie Brookes said he preferred to bank his improving profits, giving him the flexibility to drive sales in the second half by increasing promotional activity and discounting.

Shares in David Jones rose 13? to $4.74, while Myer rose 6? to $3.25.