Citing good cost management as the foremost factor determining Australian upmarket department store David Jones’ notably positive outlook for the forthcoming Christmas sales period, the store’s CEO Mark McInnes said that the store is “well positioned” to report profit-spinning sales growth in the “next up-cycle.”

Addressing the shareholders of David Jones at the company’s annual general meeting in Melbourne on Monday, McInnes said: “There is upside for gross profit margins in a strong sales environment. The signs are that things are improving and there is a bias to the upside, but the macro-economic situation is still fragile.”

Noting that the first quarter same-store sales at David Jones has shown a 1.9 percent improvement, McInnes added that in the second half of the ongoing fiscal, the retailer’s gross profit (GP) margin increased by 50 basis points.

McInnes also said that David Jones’ GP margin target range lies between 39.5 percent and 40 percent all the way through the economic cycle. Specifying further, McInnes said that despite the recent economic downturn and even the one in 1990, Davis Jones has been able to report improvements in basis points.

McInnes also stated that since the company’s growth program – necessitating nearly $400 million capital investment over the coming four years - is fully funded; the company does not need any additional debt funding to fund its extensive growth program.