* H1 profit A$80.7 mln vs analysts' f'cast of A$74.5 mln
* Hit by higher labour costs, spending on new stores,
* Remains cautious about the rest of the year
* Welcomes David Jones consideration of takeover proposal
(Adds share move, earnings details, company comments)
SYDNEY, March 20 Australia's biggest department
store, Myer Holdings Ltd reported a first-half profit
decline that was not as bad as expected, but offered a downbeat
outlook for the rest of year that sent its shares sliding.
The mid-to-up-market retailer said it remained cautious
about the trading environment for the rest of the year due to
"continued pressure on discretionary income and uncertain
Hit by higher labour costs and spending on new and
refurbished stores, its net profit for the six months ended Jan.
25 fell 8 percent to A$80.7 million ($73.5 million). That was
higher than an average forecast of A$74.5 million from four
Shares in Myer fell, trading 4.1 percent lower at A$2.55 as
of 2313 GMT. At one point, they hit a one-month low of A$2.50.
Myer said first-half total sales edged up 0.3 percent to
A$1.737 billion, with comparable store sales climbing 1.2
percent, but added that expected store closures and
refurbishment would hurt sales in the second half.
It also said online sales would double over the current
business year, with the online business reaching "break-even".
Myer has proposed taking over smaller rival David Jones Ltd
, with both firms looking to cut costs, take on foreign
competitors and catch up with the growing trend in online
David Jones, which rejected the offer last year, said
earlier this week it would assess the value of the proposal,
prior to reopening discussions with Myer.
"We welcome David Jones' engagement of a strategic adviser
to assess the proposal and the potential synergies it would
deliver," Myer said in a statement.
David Jones reported a 4.6 percent fall in first-half net
profit on Wednesday, the smallest decline in three years,
beating expectations as improved sales overcame lower earnings
from financial services.
David Jones shares fell 1.8 percent to A$3.27 as of 2313
GMT. They had jumped around 15 percent since the proposal was
($1 = 1.0987 Australian Dollars)
(Reporting by Maggie Lu Yueyang; Editing by Lincoln Feast and