Solid performance against challenging macro backdrop, underpinned by strong growth from resilient foods business
The Group’s turnover and concession sales from continuing operations (i.e. excluding David Jones, disposed of in the prior year) for the 26 weeks ended 24 December 2023 increased by 5.4%, and by 4.4% in constant currency terms. This should be considered in the context of the high base in the prior period, in which sales from continuing operations grew by 12.5%, driven in part by the post-Covid pent-up demand in Australia. During the last six weeks of the period, including sales during the key festive season, trading momentum accelerated to 7.2%, supported by our robust trade plans.
Our Food business delivered strong underlying growth, re-enforcing its strength and resilience, and the unwavering trust customers place in our brand. Turnover and concession sales grew by 8.4%, and by 7.2% on a comparable store basis, notwithstanding the impact of increased levels of loadshedding and the Avian flu. As we continue to invest in price, underlying product inflation for the period averaged 9.1%, below headline food inflation. Sales grew by 8.6% in the last six weeks of the period, delivering positive underlying volume growth as product inflation eased. Space grew by 3.3% over the prior period, while online sales increased by 46.6%, contributing 5.1% of South African sales, driven primarily by increased penetration of our on-demand Woolies Dash offering.
Whilst our Fashion Beauty and Home business continues to make steady progress against its strategic priorities, sales for the 26-week period were impacted by poor availability, due in part to the late arrival of certain summer ranges arising from congestion at the ports. Turnover and concession sales grew by 2.2%, with comparable store sales increasing by 1.5%. Sales growth in the last six weeks of the period improved to 3.8%, supported by the successful execution of our Black Friday promotions and festive season trade. Our teams remain focused on full-price sales, which positively impacted price movement of 11.4%. Net trading space increased by 0.3% relative to the prior period, while online sales grew by 26.9% and contributed 5.4% of South African sales. The Woolworths Financial Services book reflects a year-on-year increase of 4.9% to the end of December 2023, driven by growth in new accounts and credit card advances. The annualised impairment rate for the six months ended 31 December 2023 was 6.3%, compared to 5.5% in the prior period. While this reflects the strain that consumers are under in the current macro-economic environment, it is reducing from the peak of the last quarter of the previous financial year.
COUNTRY ROAD GROUP
Country Road Group sales for the current period declined by 5.0% in a challenging trading environment, with consumer sentiment In Australia at near-record lows. This should also be considered in the context of a high base in the prior period in which sales grew by 25.5% following the strong recovery from the Covid-impacted lockdowns. Sales growth in the last six weeks of the period was positive, at 1.3%.
The Country Road brand continues to deliver a market-leading performance across key categories. Trading space increased by 6.6% during the period, supported by the ongoing expansion of our wholesale and concession channels. The contribution from online sales increased marginally to 26.8% of total sales.
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NOTES TO EDITORS:
Woolworths Holdings Limited (WHL) is listed on the JSE Limited Securities Exchange (JSE) with operations across the southern hemisphere. The Group’s vision is to be one of the world’s most responsible retailers, which reflects the organisation’s passionate commitment to doing good business for our customers, our people and our planet. See more information here.
The Group consists of two major operating divisions:
Sustainability is core to our business and is put into action through our Good Business Journey programme which enables a consistent approach to managing sustainability issues across the Group. The programme focuses on eight focus areas: people, social development, health and wellness, sustainable farming, ethical sourcing, packaging and waste, water and energy and climate change. See more information here.
Woolworths Financial Services (WFS) is a joint venture between Woolworths and Absa Group Limited, with Absa Group Limited owning 50% + 1 share.
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