Retailer Woolworths Group recorded a 5.6 per cent increase in group sales to $67.9 billion, with its Australian Food sales growing 5.6 per cent to $50.7 billion. Its net profit fell 0.6 per cent to $1.7 billion in the 52 weeks to 30 June before significant items.
Woolworths Group CEO, Brad Banducci, inflation moderated in its Food and Big W businesses with average prices in food retail in Q3 and Q4 dropping 0.2 and 0.6 per cent respectively.
“Group normalised EBIT for F24 increased 1.1 per cent driven by Australian Food and Australian B2B, offset by a decline in New Zealand Food and BIG W,” Banducci said.
Snapshot
- Group Sales: $67.9b, up 5.6%;
- EBIT: $3.2b, up 3.4%;
- NPAT: $1.7b, down 0.6%
- NPAT after significant items: $108m, down 93.3%;
- significant items: $1.6b
- average digital weekly visits: 27.2m, up 19.7%; and
- food waste: 80% diverted, up 8%.
Sales momentum in F25 is improving across the group. In Australian Food, the first eight weeks saw sales increase by three per cent.
“We have strong end-to-end productivity plans in place, which are important to delivery in F25, given elevated wage inflation and mix pressure on our cost base. We remain focused on growing our customers’ shopping baskets but expect cost-of-living pressures to persist with cross shopping and trading down continuing,” Banducci said.
FY25 will also see costs of $90-100 million for the ramp up and commissioning of new distribution centres.
New Zealand Food and BIG W had a challenging year impacted by value-conscious customers cross-shopping and trading down but both businesses made good progress on their transformation plans with improved Customer scores and item growth in Q4.
Banducci said while both were improving, performance well below financial potential. He added there will be improvement but will take time for the businesses to return to full earning capacity.
eCommerce growth was a highlight, with WooliesX normalised sales growing 19.8 per cent and accounting for around half of Australian Food's sales growth.
“WooliesX DAP & EBIT increased by 94 per cent, contributing around three quarters of Australian Food EBIT growth,” he said.
Group eCommerce sales in F24 reached almost $8 billion, with normalised sales up 18.5 per cent compared to the prior year and 19.1 per cent in H2. Penetration in FY24 increased 158 bps to 12.5 per cent with sales growth led by WooliesX.
FY24 saw the group acquire 55 per cent of Petstock Group in January, sell a five per cent stake in Endeavour Group in May, and acquired the remaining 35 per cent of PFD from the Smith family in August.
Proceeds from the Endeavour Group sale were returned to shareholders via a $489 million (40 cents per share) special dividend, which will release $209 million of franking credits.
