Woolworths Group booked lower earnings despite higher sales in the last fiscal year.
The supermarket chain’s net profit before significant items slid 0.6 per cent to $1.71 billion while net profit after significant items plummeted 93.3 per cent to $108 million.
Woolworths incurred significant items of $1.6 billion related to its previously disclosed New Zealand food impairment and mark-to-market loss on Endeavour Group disclosed in the fiscal first half.
The group’s sales climbed 5.6 per cent to $67.92 billion.
Its Australian food segment sales increased 5.6 per cent to $50.74 billion while Australian B2B sales rose 6.1 per cent to $4.59 billion. New Zealand food sales jumped 4.3 per cent to $7.55 billion.
Big W’s sales dropped 2.1 per cent to $4.69 billion while other segment’s sales stood at $356 million.
Total group e-commerce sales improved 20.8 per cent to $7.96 billion.
“Looking ahead, improving customer scores, item growth, and lower inflation provide reason for optimism,” said Brad Banducci, outgoing Woolworths CEO.
“However, we also know that our customers remain under significant mortgage and rent-related financial stress and anticipate them to remain cautious with the trading environment expected to be challenging for the rest of the financial year.”
In the first eight weeks of the current fiscal year, Australian and New Zealand food sales increased 3 per cent and 1.5 per cent, respectively. Big W’s sales remained flat amid markdowns to clear the autumn/winter range.
Woolworths’ profit decline was a contrast with the improvement at archrival Coles, where both sales and profit increased last year.
