In a trading update provided by the Australian retailer, Myer Holdings (ASX:MYR), analysts at Citi note that it reinforces brokerages' ‘cautious’ perspective on its retail rival, the Accent Group (ASX:AX1).

Myer’s shares plunged by as much as 15.5% marking their worst performance in nearly three years on Tuesday following a weaker-than-projected forecast by the company for its net profit after tax (NPAT) for fiscal year 2023.

The company’s NPAT expectation falls between A$69 million and A$73 million, which does not meet the Refinitiv estimate of A$88.5 million.

According to Citi, the Myer update aligns with the concerns it has previously raised for the Accent Group, pointing out the lagging consumer environment and escalating business costs.

The analysts maintain that the higher inventory clearance in departmental stores hints that Myer has possibly amplified discounting to back sales as consumers cut back on discretionary expenses.

Citi also conveys ongoing bearish views on Accent Group’s sales projection for the first half of 2024 and fiscal 2023.

Myer Holdings (ASX:MYR) is an Australian department store group whose operations involve the business of retailing a broad range of goods in Australia.