Background: Myer started back in 1900 in Bendigo before growing into one of Australia's biggest department store names. For generations, it was the place or everything - from perfume, to pyjamas, and panic-buying birthday and Christmas presents. Unfortunately, Myer has been on the decline ever since its IPO in 2009.

What happened: Myer just posted a $276 million loss over the last financial year. To make things worse, its total sales fell 2.7% in the first eight weeks of the new financial year. The culprit? It's the economic quadrella: higher fuel prices, slower wage growth, weaker property prices and three RBA rate hikes this year.

What else: Despite this, Myer's shares actually jumped nearly 10% at one point shortly after the financial update. While the results weren't great, Myer is still doing better than David Jones and the fashion retailer Cue, which collapsed last week. And there was another very important detail buried in Myer's results... turns out a big chunk of the loss was actually an after-tax impairment.

What's the key learning?

💡 A company can post a $276 million loss without actually losing $276 million in cash. That's because of an impairment, which is when a company admits something it owns isn't worth what it thought.

💡 If you strip out the write-downs, Myer's underlying profit was $42.5 million, which was down 2.9% on last year. While an impairment isn't exactly a loss of cash, investors still shouldn't ignore it because it's a sign that management is expecting the business to generate less money in the future.

💡 Myer's not the only one. In 2023, Star Entertainment wrote down its casinos by $2.17 billion, turning a $41 million underlying profit into a $2.44 billion loss. So when you see a scary headline loss, it's always worth checking the underlying numbers too... because it may not be as bad as the first glance.