While global economic conditions continue to be tough, Woolworths has experienced overall sales growth of 5.1 per cent in the first nine months of the trading year.
The supermarket chain said its third-quarter food and liquor sales in Australia grew 4.6 per cent and a same-store sales growth of 3.3 per cent. The positive outcome was experienced due to the inflation prices of produces experienced following the Queensland floods.
“Despite the continuing deflationary effects across our businesses and the disruption caused by various natural disasters, this represents an improving sales trend compared to the first half increase of 4.0%, particularly in all of the Australian businesses,” Woolworths CEO Michael Luscombe said in a statement.
With this outcome, Woolworths has reaffirmed its full year net profit guidance to be in the range of 5 to 8 per cent and its earnings for the full year of 6 to 9 per cent.
“The market continues to remain competitive with a less confident consumer who is spending less whilst having a greater propensity to save,” Woolworths said.
“This combined with the uncertainty around the level of inflation going forward, the risks of future interest rate rises, and a continuing strong dollar provides a platform for a potentially subdued trading environment particularly in the discretionary sectors.”
Its New Zealand supermarket division achieved sales of NZ$1.4 billion for same period, representing a 3 per cent increase and continues to be challenging due to the Christchurch earthquakes where four damaged stores remain closed.
“As advised previously Woolworths will incur costs, not covered by insurance, associated with the NZ earthquakes and the Australian floods. While an estimate has been made for these costs in our profit guidance the final amount has not yet been determined,” Woolworths said.
BIG W delivered positive Easter adjusted sales growth in the third quarter of 2 per cent. This compares to a 2.8 per cent total sales decrease for the first half. Total sales were positive in both January and February with March a bit weaker. Sales in the toys, office and home departments were strongest in the quarter.