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Woolworths makes sales strides, but profit drops during Omicron challenges

Woolworths Group has reported group sales growth of 8 per cent in the half-year to January 2, reaching $31.8 billion. 

However, earnings before tax and interest fell 11 per cent to $1.38 billion. Group net profit after tax on continuing operations declined by 6.5 per cent to $795 million. E-commerce sales were estimated at $3.48 billion.

Across its Australian food division, total sales growth was solid at 3.4 per cent moderating over the half as restrictions eased, however EBIT fell 7.6 per cent to $1.2 billion reflecting the higher costs of operations due to Covid.

In New Zealand, EBIT increased by 3.3 per cent with e-commerce sales increasing to 22.6 per cent of total sales. 

Store closures in Victoria and NSW affected Big W’s sales and EBIT with sales decreasing 9 per cent compared to the previous year. EBIT declined to $25 million while e-commerce sales increased by 69.4 per cent as sales moderated in the second quarter with store reopenings post lockdown.

The group’s Everyday Rewards business continued to build membership, up by 4.5 per cent to 13.3 million compared to the second quarter last year. Partnerships with Marley Spoon, HealthyLife and Everyday Markets provided consumers with more offers and ways to earn points, boosting interest. 

Brad Banducci, CEO of Woolworths Group, said the business is moving into a more consistent operating rhythm. “It was a challenging half for our customers and team, and this was reflected in our customer scores and financial performance,” he said.

“We made good progress in our strategic agenda by selectively investing in building our connected customer proposition, successfully transitioning ownership to the partnership with [spun-off liquor business] Endeavour Group and establishing our Advanced Analytics platform in partnership with Quantium,” he said. 

The group also completed 28 store renewals in Australia and New Zealand despite Covid challenges.

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