Woolworths lifts after flagging sales growth of more than a fifth

Food and fashion retailer Woolworths’ shares gained almost 5% on Wednesday, after it said a robust recovery of its Australian business and a successful winter sale in SA helped lift its revenue by over a fifth so far in its 2023 year.

The group said in an update that its turnover and concession sales for the 20 weeks ended 13 November 2022 rose by 23.3% year-on-year, or by 20.3% in constant currency terms, amid the return of customers to physical stores, particularly in Australia.

Covid-19 lockdowns had weighed heavily on its Australian businesses in 2021, but a return of customers to stores has helped lift sales to above pre-pandemics levels.

Sales at David Jones jumped 55.3% so far in 2023, the group said, with its flagship and CBD stores performing well ahead of expectations. Country Road’s sales grew 36.2%, underpinned by strong performances from the Country Road, Politix and Witchery brands, which follows the successful launch of new ranges, which resulted in a higher proportion of full-priced sales, Woolworths said.

In SA, the group said its food business grew turnover and concession sales 7.3%, which was “notwithstanding the considerable disruption caused by load shedding, which has had a pronounced impact on our predominantly fresh categories across the business, in terms of foregone sales, increased waste, and significant increases in diesel costs required to support trade during the extended power outages”.

Underlying product inflation was 7.9%, but prices moved an average 6.3% during the period, with the group saying it had sought to improve its value proposition.

The Fashion Beauty Home business had a strong start to the year, with turnover and concession sales growing by 10.8%, Woolworths said, adding that it grew its full-priced sales by 15.2% in SA, where clearance sales fell 20%, “following the smallest and most profitable winter sale to date”. Price movement averaged 11.1%.

The firm, whose half-year ends on 25 December, said it expects earnings to rise by at least a fifth. -news24.com