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Australia's David Jones Year Profit Jumps 35%

Upmarket Australian retailer David Jones said on Wednesday its full-year profit climbed 35% on strong winter sales, and confirmed its outlook for an 8% -13% rise in profit in the current year.

The department store chain said underlying profit rose to A$109.5 million (US$96 million) for the year to July 28, from A$81.1 million in the previous year, excluding a gain on the sale and leaseback of stores.

That was slightly above market forecasts of A$108.8 million, according to a Reuters Estimates survey of eight analysts. Second-half profit after tax rose 44% to A$38.5 million.

David Jones said trading in the first eight weeks of the current financial year had been solid, with same-store sales growing about 5%.

Australia's 16 years of uninterrupted economic growth and a 30-year low in unemployment has been a boon for retailers, and this year consumers have also benefited from improving house prices and record highs on the stock market.

David Jones' same-store sales rose 9.2% in the fourth quarter, helped by a delay in the start of winter clearance sales. Total sales for the year rose 8.9% to A$1.98 billion.

David Jones, which has 36 stores, said it is benefiting from a slight shift downmarket at larger competitor Myer, the 61-store department chain owned by TPG that is increasingly focusing on house brands.

"Our business looks set to continue benefiting from the unique opportunities arising as a result of the recent industry restructure," Chief Executive Mark McInnes said in a statement, referring to Myer.

David Jones' shares have fallen 8.8% over the past three months, but are still up about 48 percent over the past year. It closed on Tuesday at A$4.95.

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