David Jones lifts Q2 sales

Retailer readies for improvements in customer sentiment, increases sales.

David Jones (DJS) says its strategic plan will help it leverage improvements in consumer sentiment and trading conditions after lifting second-quarter sales, although it expects aggressive discounting in the market to continue.

Total sales lifted 4.7% to $618.1 million in the second quarter, the period from October 27, 2013 to January 25, 2014, compared with $590.1 million in the previous corresponding period.

Like-for-like sales rose by 2.1% in the second quarter to $602.2 million, compared with $590.1 million in the second quarter of fiscal 2013.

Like-for-like sales were broadly in line with Bloomberg analyst estimates that predicted on average a two% increase.

Total sales revenue for the half-year increased by 3.6% to $1.04 billion, compared with $1.01 billion in the prior corresponding period.

Like for like sales for the half were $1.02 billion, an increase of 1.1% from $1.01 billion in the first half of 2013.

David Jones said online sales increased by 150% in the second quarter as it launched its new online store, featuring an online gift registry and "click and collect" functionality.

The group said its online store operated "robustly and uninterrupted" throughout the Christmas and clearance periods.

The retailer noted positive sales growth in womenswear, menswear, beauty, shoes and accessories, childrenswear and homewares, saying it completed its exit of low productivity categories such as outdoor furniture, music and DVDs this quarter.

Chief executive officer Paul Zahra noted growth in foot traffic and basket size in the second quarter.

"Whilst the sales growth experienced by the company in the second quarter was pleasing we did experience aggressive discounting in the market pre-Christmas, in particular in womenswear," Mr Zahra said.

"We expect this aggressive discounting to continue in the second half.

"This quarter we were able to capitalise on the future strategic direction plan initiatives we implemented over the past two years.

"We continue to make good progress in the roll-out of our plan which will enable us to leverage improvements in consumer sentiment and trading conditions."

Mr Zahra is expected to tell analysts this morning that he has decided not to resign and will continue to lead the company, The Australian reports.