Australian department store chain Myer (ASX: MYR) today reported a 0.7 per cent increase in full-year sales and forecast earnings before interest and tax (EBIT) to exceed previous guidance.

Sales climbed to $3.23 billion for the 52 weeks to July 24, 2010, 2010, according to the upscale retailer.

Total sales were 1.3 per cent up after excluding the effect of the rebuild for the Myer Melbourne branch.

On a like-for-like basis, sales edged up 0.5 per cent over the period.

Compared with the corresponding period in 2009, turnover in the fourth quarter declined 1.4 per cent to $815.8 million.

Myer expects EBIT for the full year to range from $265 million to $272 million, above the company's prospectus and previous guidance of $261 million.

It said total sales were 1.3 per cent higher after excluding the impact of the rebuild for the Myer Melbourne store.

Women's, men's, and children's wear as well as furniture were the best performing categories during the financial year, while Victoria (excluding the Melbourne store) and New South Wales were the top-performing states, according to the company.

Myer chief executive Bernie Brookes said said the trading environment in the fourth quarter remained ''very challenging'' as consumer confidence remained weak amid interest rate hikes and uncertainty on the global economic outlook.

"Delivering sales growth in the fourth quarter was always going to be a challenge given that sales in the prior year benefited from significant Federal Government stimulus payments," he said.

"During the quarter we used a number of levers to drive sales, including repeating our Secret Sale which was well received by customers, and executing a successful stocktake sale.

"In addition, our renewed focus on visual merchandise and in-store presentation also helped drive sales."

Mr Brookes said Myer was in a new phase of expansion, with 14 new stores planned within four years.