Myer Holdings Ltd (ASX: MYR) and Premier Investments Ltd (ASX: PMV) shares are catching the eye on Monday.

In morning trade, the two ASX retail stocks are crashing deep into the red.

Myer shares are currently down 16% to 96 cents and Premier Investments shares are down 15% to $28.20

Why are these ASX retail stocks crashing?

Investors have been selling the companies' shares today after they released trading updates.

Let's start with how Myer is currently performing.

According to the release, for the 22 weeks ended 28 December, group comparable sales were in line with the prior corresponding period, while total sales were down 0.8% to approximately $1,592 million.

The ASX retail stock notes that the latter was impacted by the temporary closure of the Werribee store between 14 February and 29 November 2024.

Myer's online sales were up 2.8% on the prior corresponding period and represented 22% of total sales in the period.

As for earnings, the company's operating gross profit was down 2.6% to approximately $560 million and EBIT was down approximately 25% to $48 million.

Myer Executive Chair, Olivia Wirth, commented:

In challenging trading conditions for the retail sector driven by a tough macroeconomic environment, Myer's year-to-date sales performance has been stable. Trading during last year's key sales events including Black Friday was strong, but consumers remain cautious and focused on value given persistent cost-of-living pressures. Despite the challenging trading environment, I am pleased to report that we continue to record solid growth in our market-leading MYER one loyalty program.

Premier Investments update

It has been a similar story over at Premier Investments with the ASX retail stock also being impacted from challenging macroeconomic conditions.

Noting that its first half is still continuing (with Back-to-School and January sales yet to conclude), the Premier Retail business is forecasting total first half sales in the range of $855 million to $865 million. This is down from $879.5 million in the prior corresponding period

In respect to earnings, Premier Retail's underlying EBIT is expected to to be in the range of $160 million to $165 million. This represents a sizeable 21.3% to 23.7% decline year on year from $209.8 million.

Echoing what Myer said, management commented:

Retail conditions have remained challenging through 1H25 with customers continuing to experience cost of living pressures across all of Premier Retail's global markets and having a strong focus on value.

Merger update

Next week, the two ASX retail stocks' shareholders will be asked to vote on the merger of Myer with Premier Investments' Apparel Brands.

Despite these updates, both boards remain positive. Premier's Board of Directors has once again unanimously recommended that its shareholders vote in favour of the proposed resolutions. Myer has done the same, highlighting the following

Myer continues to see significant opportunity from the Proposed Combination to deliver a step-change in Myer's market position and generate substantial strategic and financial benefits through enhanced scale, diversification, revenue and growth opportunities as well as material potential cost and revenue synergies across supply chain, sourcing, property and brand management.