Woolworths' second quarter sales rise 8.1%

Wednesday 28th January 2009

Woolworths, Australia's biggest retailer, reported an 8.1% jump in its latest quarter on increased revenue from its supermarkets and Big W discount stores.

Sales rose to A$13.29 billion in the 13 weeks ended January 4, from A$12.3 billion in the same period a year earlier, the Sydney-based company said in a statement. Shares of Woolworths rose 2.8% to A$26.94 and have declined 16% in the past 12 months.

Woolworths is increasing sales even as consumer confidence slumps, luring customers with its loyalty program and revamping its stores. That's given it the edge over Wesfarmers, which became the nation's No. 2 retailer by acquiring Woolworths' rival Coles Group. Wesfarmers stock has sunk 53% in the past 12 months.

The sales gain "is a pleasing result in a more challenging economic environment and I am confident that we are well positioned to meet future challenges," said chief executive Michael Luscombe.

He said full-year revenue is difficult to predict given the market turmoil and weakening Australian economy. Sales from continuing operations, excluding fuel sales, would rise "in the upper single digits" in the full year, he said.

Sales from Australian supermarkets, Woolworths' biggest business, rose 9.8% to A$8.59 billion in the latest quarter. In New Zealand, where Woolworths competes against the Foodstuffs cooperative, sales rose 3.9% to $1.3 billion. Big W sales rose 9.5% to A$1.37 billion.

Sales of fuel dropped 0.1% to A$1.3 billion and revenue from consumer electronics, including the Dick Smith and Powerhouse stores, rose 12% to A$471 million.

Sales from the company's hotels, the biggest line-up of pubs in Australia, rise 1% to A$292 million.

By Jonathan Underhill

Comments from our readers

No comments yet