Supermarket heavyweight Woolworths Group [ASX:WOW] has followed competitor Coles Group [ASX:COL] in announcing its half-year results.
The supermarket chain saw its share price inching very slightly up by a percentage after announcing its half-year results for fiscal 2023, showing its group sales had increased 4% to $33.2 billion.
At time of writing, a WOW share was worth $37.09, and in the past few weeks of 2023, the group surged 10.5% in share value. In its sector, it’s up nearly 4%, while COL’s shares were trading at $18.04 on Wednesday, having dropped 0.5% overnight:
www.TradingView.com
Woolworths enjoys higher gains post-COVID, despite inflationary pressure
The giant supermarket company’s revenue pulled from operational sales, goods, and services reportedly went up 24.9% to $845 million.
Group NPAT rose 14% on the same time last year to $907 million and the group’s EBIT hit $1.64 billion, an 18.4% increase. However, net profit on statutory basis fell 88.1% from $7.06 billion in 2021 to $845 million.
Woolworths’ food sales increased 2.4%, despite a decline of 7.5% in e-commerce sales as more consumers opted for shopping in store.
Food-related inflation continued to rise in the half, applying cost pressure across the industry as well as for customers already facing cost-of-living pressures.
The New Zealand Food Company had a challenging half which was impacted by a combination of lower sales, ongoing COVID disruptions, and workforce expenses, however, the group noted signs of stability and increasing trade.
Big W experienced more of a ‘normal’ trading environment in the half, particularly compared with the numerous store closures enforced a year earlier. Sales growth for Big W was very strong at 15.3%.
Woolworths’ CEO Brad Banducci stated:
‘Our first half result benefitted from a focus on improving our customer shopping experience, restoring our operating rhythm, the non-recurrence of material COVID costs in the prior year and strong seasonal trading. Despite continued supply chain challenges during the half, most customer metrics improved.
‘Cost-of-living pressures are being felt by our customers due to industry-wide inflation and helping all our customers get their Woolies worth remains our number one priority. A focus on affordability and availability, and an inspirational Christmas resulted in Group H1 sales growth of 4.0% (3-yr CAGR: 7.5%) and EBIT growth of 18.4% (3-yr CAGR: 7.1%).’
Banducci congratulated the group on a balanced result after an extended period of operational challenges and trading volatility.
Earnings per share (EPS) increased 11.7%, from 64.3 cents to 71.9 cents year-on-year, and an interim dividend of 46 cents was delivered by the retailer, up 17.9% from last year.
WOW anticipates more challenges to come during the next 6–12 months as cost-of-living pressures continue to persist, but says the company is braced with strategies to satisfy customers and continue fuelling its plans for growth.
Regards,
Mahlia Stewart,
For Money Morning
All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.
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