Myer boss Richard Umbers' $600 million transformation strategy for the grand dame of Australian department stores is gaining traction and investor support.
But analysts warn the department store is benefiting from more than two decades of choppy sales as well as the under-performance of discount operators Big W and Target.
Myer and David Jones are reaping sales from their investment in digital purchasing platforms as well as the weak Australian dollar, according to retail analysts, which is believed to be driving double-digit sales growth in both chains' cosmetics and accessories segments. 
A weaker Australian dollar has slowed overseas online beauty and apparel purchases and market watchers suggest Myer and David Jones are benefiting from a shift back to domestic retailers.
David Jones' South African owner, Woolworths Holdings, will provide a trading update in   July but broker Citigoup claims Myer's strong third quarter sales show it is taking market share from its arch-rival.
David Jones half-year sales surged 11.2 per cent or 9.7 per cent on a comparable stores basis but earnings slipped close to 3 per cent in the same period, a fall Woolworths put down to marketing costs and the rollout of private labels.
Citigroup head of research Craig Woolford said Myer's unexpectedly strong third quarter sales growth demonstrated the chain was "closing the gap on David Jones".
Mr Woolford said Citigroup expected Myer to reach the top end of the full-year net profit after tax guidance of between $66 million and $72 million, powered by the expansion of the chain's concessions.
However there are still significant risks to the Myer comeback story, according to retail insiders.
They include Woolworths' work to turn around Big W and Wesfarmers' investment in Target.
A resurgent Target could prove costly to Myer, taking sales from the "broad centre belt" a customer segment Myer can't aggressively chase, according to Atomic 212 chief Jason Dooris.
Mr Dooris said the centre belt, or middle market, had broadened enormously in the past few years as shoppers blended high-end brands with budget or private label apparel but it was a tough market for Myer to fight for.
"Target can push into premium but Myer can't go too down market or into that centre belt because it risks losing some of its brand prestige," Mr Dooris said.
Unveiling Myer's strong third quarter sales results this week, Mr Umbers welcomed the investment in Target and Big W, which he said strengthened the department store model.
"In a market where department stores are a relatively small proportion of total sector revenue, there's plenty of opportunity for the department sector, as a whole to grow and prosper," Mr Umbers said.
Former Kmart boss Guy Russo is driving the turnaround of Target as well as the merger of a number of its back-office functions with Kmart after stepping into the new role of department stores chief at Wesfarmers.
It's early days but Target has already cut staff and plans to shift its head office from Geelong to Melbourne.
Mr Russo, who took Kmart from the brink of bankruptcy to the star of the discount department store sector, has not provided any detail on the Target strategy but market watchers suggest he will work hard to differentiate it from Kmart, which owns the value territory in the sector - or the bottom of the market.
The power of Target is its brand, and shopper loyalty to its brand, said one retail insider and he said it was vital the chain remained true to its core values.
"Target has got to make sure it keeps its identity, you are either at the bottom or at the top and Target will do well at the premium end of discount department stores," he said.
"In apparel, there's a big competitive risk (for Myer) from a resurgent Target, because it's brand loyalty is so significant."
Myer's third consecutive quarter of positive sales growth triggered a rating upgrade from broker JP Morgan, however analyst Shaun Cousins said the re-rating reflected the department store's historical financial performance along with better than expected sales.
"Poor financial performance over many years provides a runway for a new management that has been underestimated," Mr Cousins said.
"While there remains questions about the durability of the sales strength, the sales performance is much better than expected."