Myer's core NPAT for 1H15 was A$62.2m, down 23% on the previous-corresponding-period

Myer's core NPAT for 1H15 was A$62.2m, down 23% on the previous-corresponding-period. Like-for-like sales rose by 1% in the second quarter. This appears ok, but when you factor in the uplift from refurbished stores, it implies plenty of the existing stores saw negative comp sales... a worrying trend. MYR pointed to womenswear as the key challenge for the group. Gross margins fell due to promotional activity to stimulate sales (a worrying sign as this isn't really eventuating) and the lower AUD. The interim dividend of 7 cents per share represents a 67% payout ratio. Management has pointed to a very tough second half of the FY15. Full year guidance has been cut to $75-80m (excluding A$7m of one-off costs). This is around 13% below consensus. Plenty of uncertainty and a strategic review is ongoing... We continue to avoid this stock in spite of the seemingly 'cheap' valuation and relatively high debt. (VIEW LINK) @morgans