Woolworths Holdings published its trading update and trading statement for the 26-week period ended 29 December 2024, highlighting a mixed performance across its portfolio.
The group reported a 5.7% increase in total turnover and concession sales for the period, with a 6.2% increase in constant currency terms compared to the prior year’s 26-week period, which ended on 24 December 2023.
Woolworths’ performance was marked by solid growth in its Food business, though its apparel sectors, including Fashion, Beauty and Home (FBH) and Country Road Group (CRG), experienced more difficulties.
Food Business: Woolworths South Africa’s Food business led the charge, achieving a 9.1% increase in turnover and concession sales for the period. Notably, market-leading sales growth of 11.4% was recorded, driven by strong volume growth, improved product availability, and Woolworths’ innovative offerings.
Woolies Dash, the group’s on-demand delivery service, saw a 49.2% increase in sales. The Food division accounted for a large portion of the Group’s turnover, maintaining a positive outlook amid moderating inflation and easing interest rates in South Africa.
Apparel and Home Business (FBH): Woolworths’ Fashion, Beauty, and Home business grew by 2.5% overall, with a 2.7% increase in comparable-store sales.
However, the last eight weeks of the period saw a slowdown in sales growth, impacted by issues such as delays in product deliveries and changes in distribution centre systems. Despite this, the Beauty business delivered exceptional growth of 17.3%. The division saw positive volume growth, despite fashion deflation of 0.8%.
Country Road Group: The Country Road Group (CRG), which includes the Country Road and Witchery brands, faced a more difficult environment in Australia and New Zealand, exacerbated by high interest rates, increased living costs, and a promotional retail landscape.
The group’s apparel sales declined by 6.2% for the period, with a 7.8% drop in comparable-store sales. Despite improvements over the last eight weeks, especially during key trading events like Black Friday and the festive season, the division struggled with negative operational leverage due to its higher cost base post the David Jones sale and restructuring process.
Despite challenges in the apparel sector, Woolworths saw continued growth in its online platforms. Food online sales grew by 37.2%, contributing 6.4% to total food sales. FBH also recorded 25.2% growth in online sales, which now account for 6.6% of total sales in this division. The Group’s digital services, including Woolies Dash and online platforms, are emerging as key drivers of future growth.
Woolworths also provided a trading statement for the six months ended 29 December 2024. While the Food business continues to perform well, weaker-than-expected performance from apparel segments has impacted overall earnings.
Headline Earnings Per Share (HEPS) is expected to be between 18% and 23% higher, in the range of 148.4 cents to 158.6 cents, compared to 203.3 cents reported for the same period last year. This increase is largely driven by the profit from the sale of the property at 294 to 310 Bourke Street, Melbourne, for A$223.5 million in December 2024.
Adjusted Diluted HEPS (adHEPS), which adjusts for one-off items, is anticipated to decrease by 16% to 21%, with an expected range of 165.7 cents to 176.1 cents, down from 209.7 cents in the prior year.
The group noted that consumer sentiment in South Africa is gradually improving, aided by easing inflation, lower interest rates, and a prolonged suspension of loadshedding (power cuts). However, discretionary spend remains constrained, which has been particularly evident in the apparel and fashion sectors.
In Australia, consumer confidence has been bolstered by Black Friday promotions and improving retail sentiment, but high interest rates and living cost pressures continue to challenge consumer behaviour, particularly in discretionary spending categories.
Woolworths expects to publish its interim results for the 2025 financial year at a later date, providing further insights into the group’s performance and strategic direction.
