Woolworths books higher net profit, sales in first half

(Source: Bigstock)

Solid results in the Australian food and B2B business segments drove an increase in first-half sales and net profit for Woolworths Group.

The supermarket group’s net profit rose 2.5 per cent year over year to $929 million as sales jumped 4.4 per cent to $34.64 billion. Earnings before interest, taxes, depreciation, and amortisation climbed 5.3 per cent to $3.08 billion.

The company’s Australian food sales went up 5.4 per cent to $25.90 billion while Australian B2B sales increased 2.8 per cent to $2.32 billion. New Zealand food sales rose 4.2 per cent to $3.86 billion.

On the contrary, Big W sales fell 4.1 per cent to $2.6 billion while other sales slid 32.1 per cent to $40 million.

“As foreshadowed last month, Big W had a challenging first half. Outside of solid trading in key events like Black Friday and Christmas, customers are increasingly cautious and trading down,” said Woolworths Group outgoing CEO Brad Banducci.

During the first half, Woolworths launched Woolworths MarketPlus, enabling third-party merchants to sell products across the supermarket chain’s businesses including MyDeal, Everyday Market, and Big W Market.

The company also completed the acquisition of Petstock.

Meanwhile, during the first seven weeks of the second half, Woolworths saw Australian food retail sales increase 1.5 per cent while New Zealand food sales inched 1 per cent higher.

While Big W sales fell 6 per cent, Woolworths said it is optimistic to see the department store improve in the fourth quarter.

The second-half results will also include Petstock, which is expected to generate an EBITDA of $60 million to $70 million.

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