After four years of sliding profits, Myer boss Bernie Brookes hopes 2015 will be the year the department store turns around.
Myer's net profit fell 23 per cent to $98.5 million in the year to July as weak consumer sentiment and refurbishment work at several major stores took its toll.
Investors punished the retailer for the weaker-than-expected result, sending its shares down 32 cents, or almost 13 per cent, to $2.15.
The department store has been on a slide for several years amid increased competition from overseas and local retailers, and consumers still haunted by the global financial crisis and reluctant to open their wallets.
Mr Brookes expects sales and profit margins to lift in 2015, but Myer has a long way to go to get back to the near $160 million profit it made in 2010/11.
IG market strategist Evan Lucas said investors were skeptical of the retailer's ability to achieve enough sales growth to offset increased capital and operating expenses.
He said the slide in Myer's share price suggested the market was pricing in a further decline in profitability.
"Part of the reason it's being absolutely brutalised today is that the belief might not be there that that is achievable," he said.
"There is a very cloudy outlook."
Myer's forecast of a sales lift is mostly driven by the end of refurbishment work - the company has refurbished 24 stores in the past five years.
Mr Brookes said sales so far this year were "patchy".
Customer research showed Myer shoppers were worried about job security, rising healthcare and education costs, the possibility of higher taxes and impact of future interest rises, he said.
That's bad news for a discretionary retailer like Myer, which, as Mr Brookes says, relies on consumers spending what they have left after paying all their bills.
The Abbott government's inability to get key parts of its budget through the Senate was putting a further dampener on confidence and making it harder for retailers, Mr Brookes said.
"The key message from retailers is always the same, we want clear direction," he said.
"Whether they make a good or bad decision, whether it's a favourable or unfavourable decision, the worst retail environments are created when there is uncertainty."
Myer also faces a new threat from arch-rival David Jones, which is undergoing a restructure under its new South African owner, Woolworths Holdings.
Mr Brookes said he didn't know what Woolworths' plans for David Jones were, but said Myer would make sure it wasn't outdone on price or quality.
"Our objective is to make sure that a Myer customer is not disadvantaged, they are not disadvantaged in the quality of the product we have and they are not disadvantaged in the pricing that we have," he said.
MYER'S FOURTH STRAIGHT YEAR OF SHRINKING PROFIT
* Full year net profit of $98.5m, down 23 pct from $127.2m in 2012/13
* Total sales of $3.14b, steady
* Final dividend of 5.5 cents, down from eight cents
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