Australia's David Jones Profit Jumps 25%


Upmarket Australian department store chain David Jones said first-half underlying profit jumped 25 percent, helped by buoyant Christmas sales, and maintained its forecast for the rest of the year.

The retailer said it was trading at the top end of its guidance for like-for-like sales growth of 1-2 percent, but held its forecast of 8-13 percent profit growth in the second half to July 2008 as consumer spending slows.

David Jones outlined a plan this month to open new stores and expand sales of high-margin goods to help maintain profit in a weaker economy.

"We have the ability to continue delivering profit after tax and dividend growth despite a slowdown in 'top-line' department store sales growth," Chief Executive Mark McInnes said in a statement.

Net profit before one-offs rose to A$89.0 million ($81.7 million) from A$71.1 million, in line with the group's own forecast of $87.5-$89.0 million.

That compared with analyst forecasts of A$88.3 million, according to a Reuters survey of four analysts.

Worries about a drop-off in consumer spending, as high interest rates and petrol prices bite, have pushed David Jones shares down 36 percent this year, compared with a 16 percent fall for the broader market.

The chain, which has 36 stores and competes with larger rival Myer, owned by private equity firm TPG and with 60 stores, has factored in forecasts of a slide in retail spending with a trough in mid-2009.