Australia's Myer's expanded loyalty program could bring cost savings, says Morningstar

Department store Myer's MYR.AX first-half profit before borrowing costs and taxes fell by 22% to A$59 million, while sales remained steady at A$1.8 bln

Morningstar attributes profit decrease to supply chain issues and increased costs at firm's distribution center, which is expected to continue into second half

Says MYR's newly acquired apparel brands are underperforming relative to their traditional department store segment

Brokerage expects cost savings from expanding MYR's loyalty program to apparel brands' customers, introducing these brands online and better sourcing arrangements due to scale

Predicts a modest sales CAGR of 1% over the next decade, down from 2% for the combined MYR and apparel brands' sales over the 5 years ending in fiscal 2024

Brokerage cuts firm's 2025 adjusted NPAT outlook by 11% to A$50 mln

Brokerage maintains fair value estimate at A$0.83/share

Stock down 37.4% YTD