Retailer Woolworths says group turnover and concession sales from continuing operations (excluding David Jones) increased by 6.2%, despite challenging trading conditions affecting consumer discretionary spending.
The group stressed that its financial performance for the 53 weeks ended June 2024 is not directly comparable to the 52 weeks ended 25 June 2023.
Notably, the group disposed of its David Jones operations in Australia during Q3 of the 2023 financial year. Additionally, the 2024 reporting period includes an extra week of trading.
For a comparable 52-week period ending 23 June 2024 (52 weeks), sales grew by 4.3%, and by 3.2% in the second half (H2) of the year.
Online sales saw a 13.3% increase, contributing 9.2% to group sales for the year.
When including the contribution of David Jones for the prior period and the additional week in the current period, total group turnover and concession sales decreased by 16.4% compared to the prior period.
WOOLWORTHS
In South Africa, disruptions caused by loadshedding, and port congestion eased in the last quarter.
However, weak consumer confidence due to higher living costs and elevated interest rates impacted discretionary spending throughout the period, it said.
The Food business showed strong, above-market growth, reinforcing customer trust in the Woolies brand.
Turnover and concession sales grew by 11.2% (9.0% on a comparable 52-week basis). Comparable store sales increased by 6.9%, despite taxi strikes and Avian flu in the first half of the year.
Price inflation averaged 7.9% for the period. H2 growth was 9.6%, bolstered by the acquisition of Absolute Pets in Q4.
Price movement in H2 eased to 6.7%, with positive volume growth.
Trading space in Woolworths Food grew by 3.2%, while online sales increased by 52.8%, contributing 5.5% to South African sales, driven by a 71.2% increase in Woolies Dash offering penetration.
The Fashion, Beauty, and Home business faced challenges from a weak macro environment, poor availability, and increased competition from international online retailers.
Turnover and concession sales grew by 1.4%, declining by 0.4% on a comparable 52-week basis, and by 1.3% on a comparable store basis.
The Woolworths Financial Services book decreased by 2.9% year-on-year to the end of June 2024.
Excluding the impact of a partial legal book sale in June 2024, the total book increased by 1.8% year-on-year.
The impairment rate moderated to 7.0% compared to 7.3% in the prior period, remaining sector-leading, it said.
TRADING STATEMENT
Earnings per share, headline EPS, and adjusted diluted HEPS ('adHEPS') from continuing operations for the comparable 52-week period are expected to be lower than the prior period:
52 weeks to 25 June 2023 (reported) | Expected Range (52 weeks to 23 June 2024) | Expected Range (cents) | |
EPS | 421.1 | -32.0% to -37.0% | 265.3 to 286.3 |
HEPS | 423.4 | -14.0% to -19.0% | 343.0 to 364.1 |
adHEPS | 427.7 | -10.0% to -15.0% | 363.5 to 384.9 |
The group said it remains committed to its strategic initiatives and will continue to adapt to the challenging trading environment to deliver sustainable growth and value for its shareholders.
Shares in Woolworths have declined as much as 26.25% over the past year.
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