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:
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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.
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