High-end Australian department store David Jones reported its profit after tax dropped 1.5 per cent to $170.8 million and sales fell 4.4 per cent to $2053.1 million. David Jones attributed the decline the strong Aussie dollar and reduced consumer spending due to the global financial meltdown.

The store also said its new IT investment in point-of-sale systems reduced potential earnings. Income fell 1.1 per cent from $249.2 million to $246.5 million. However, it said the 1.5 per cent fall in full-year net profits was well within its expected range of 0.5-2.0 percent.

David Jones anticipates even slower sales movement during the Christmas season. Chief executive Paul Zahra said the store is now carrying out a five-year strategy through 2016 to generate sales. It said it expects a drop in 2012 first-half profit as bulk of it comes from earnings from Christmas and New Year sales. It also intends to slash man-hours and decrease stock inventories.

The firm has no plans to close any of its 36 stores, as all are highly profitable, he said. However, it does hope to further boost online sales.

Regardless of the poor sales performance and bleak 2012 profit forecast, market analysts still recommend the store to investors, saying David Jones has a good business model, maintains a healthy balance sheet, low debt and positive cash flows and remains committed to pay dividends.