Retailer Woolworths Holdings Limited (WHL) has published its financial results for the 53 weeks ending 30 June 2024, revealing a complex picture of growth in its food division and challenges across its operations.
The group pointed out that its results for the 53 weeks ending 30 June 2024 are not directly comparable to the 52 weeks ended 25 June 2023 due to the inclusion of David Jones’ contribution for nine months in the prior period and the additional week of trade in the current period.
The challenging macro-economic environment, particularly in Australia and South Africa, impacted performance.
Turnover and concession sales from continuing operations increased by 6.2%, with online sales growing by 13.3%.
However, total turnover and concession sales decreased by 16.4% due to the inclusion of David Jones in the prior period and the additional week in the current period.
Despite efforts to manage inventory, preserve gross profit margins, and contain costs, the weaker trading environment led to a decline in group adjusted earnings before interest and tax (aEBIT) by 14.1% to R5.8 billion, the group said.
Adjusted diluted headline earnings per share fell by 12.2% to 375.4 cents, and earnings per share declined by 34.1% to 277.3 cents, impacted by a non-cash impairment of goodwill.
The group ended the year with net borrowings of R5.6 billion and a net debt to EBITDA ratio of 1.45 times. The Return on Capital Employed was 18.7%, above the weighted average cost of capital of 13.9%.
In South Africa, the trading environment remained challenging, but the combined business grew turnover and concession sales by 6.7%, with operating profit up by 5.9%.
The Food business showed resilience with a 11.2% growth in turnover and concession sales, while the Fashion, Beauty, and Home segment saw a modest increase of 1.4%
Woolworths South Africa
Food Business: Turnover and concession sales grew by 11.2% for the 53 weeks. On a comparable 52-week period, sales grew by 9.0%.
Online sales increased by 52.8%, contributing 5.5% of South African sales.
Fashion, Beauty, and Home (FBH): Turnover and concession sales for the 53 weeks grew by 1.4%. On a comparable 52-week period, turnover and concession sales declined by 0.4%.
Financial Health
The group ended the year with net borrowings of R5.6 billion and a net debt to EBITDA ratio of 1.45 times. The Return on Capital Employed was 18.7%, well above the weighted average cost of capital of 13.9%.
Woolworths said it continues to navigate a challenging trading environment with a focus on managing inventory levels, preserving gross profit margins, and investing in strategic initiatives.
Despite the headwinds, the group said it remains committed to driving growth and delivering value to its shareholders.
Share in the group are down some 15% over the past year.
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