Woolworths’ posts jump in full-year profit
They’re the cute collectables we went crazy for. Now Woolies has revealed just how much extra money the Lion King-linked promotion actually earned them.
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Woolworths chief Brad Banducci says he is “cautiously optimistic” about the year ahead as the supermarket chain enjoys a bumper sales boost from its latest collectables promotion.
The nation’s biggest grocer has also launched a crackdown on theft from its self-service checkouts, with Mr Banducci admitting it had hit a level “much higher than what it should be”.
His comments came after Woolworths today handed down a trading result that showed it continues to outpace rival Coles in supermarket sales growth.
But the retail heavyweight, which owns the Dan Murphy’s liquor chain and Big W discount department stores, has largely muzzled its guns in the supermarket price wars, delivering its lowest level of price cuts since Coles began selling $1 a litre milk in 2011.
“We are cautiously optimistic,” Mr Banducci said.
“We have seen quite positive sentiment across the first eight weeks of the financial year … the question now is whether that will continue.”
Across the Woolworths group, net profit surged to $2.7 billion for the 53 weeks to June 30.
The bottom line was boosted by $1.1 billion in gains on the sale of its petrol station network but dented by a $371 million writedown related to the loss-making Big W chain.
Underlying profit from continuing operations — a measure that strips out the impact of one-offs and businesses being sold — rose 9.2 per cent to $1.75 billion. At its Australian supermarkets, normalised sales — which accounts for an extra trading week in the past financial year — were up 3.3 per cent to $39.6 billion.
Like-for-like sales, which strips out the impact of stores opening and closing, rose 3.1 per cent over the year but surged to 7.5 per cent in the first eight weeks of the new financial year as customers clambered to collect Lion King Ooshies.
That collectable craze has come to an end but Woolworths is getting ready to roll out a more environmentally friendly one based around plants.
Coles last week posted like-for-like sales growth of 2.7 per cent for the year to June.
Analysts said the result at Woolworths was in line with expectations but noted its gross profit margin in supermarkets dipped by 0.24 percentage points.
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Mr Banducci blamed the dip on higher theft and price pressure in fresh food brought on by drought.
IbisWorld industry analyst Tom Youl said Woolworths had now bested Coles in supermarket sales growth for three consecutive years.
“Woolworths’ strong revenue growth stems from a strong brand connection with fresh food and first-mover advantage into store refurbishments and upgrades,” he said.
Discount department store Big W remains a drag on Woolworths, posting a loss before interest and tax of $85 million.
That was in line with expectations and down from a loss of $110 million the previous year.
Woolworths will pay a final dividend of 57c, fully franked, up 7c from last year.
Shares in the group climbed 0.6 per cent, or 20c, today to $36.38.
Originally published as Woolworths’ posts jump in full-year profit