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A post-COVID sales dip starting to emerge at Woolworths

Business

Woolworths had a bumper December half-year with profits up 28 per cent to $1.13 billion, but it signalled the good times may be coming to an end as sales taper off.

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Shareholders will benefit from an increased dividend of 53 cents a share, up from the 48 cents in the previous half.

Revenue for the half was $35 billion and earnings before interest and tax was $2.092 billion.

Chairman Gordon Cairns said it still planned separation of its Endeavor Group which holds its hotel and bottle shops assets.

“Our plans are progressing well, with June the most likely date,” Cairns said.

Woolworths said Endeavour would evolve from ownership to partnership.

The Endeavor division benefitted from people increasingly drinking from home. Its Dan Murphy and BWS stores recorded strong sales and a record Christmas Eve.

The Woolworths e-commerce channel reported a 78 per cent increase in sales of $2.9 billion.

Chief executive Brad Banducci said group sales for the first seven weeks of the current half-year were strong.

“However, growth rates have started to moderate over the period, in line with the overall market,” Banducci said.

“We expect sales to decline over the March to June period compared to the prior year in all our businesses, with the exception of hotels where venues were closed for much of the final four months last year, as we cycle last year’s COVID surge.

“We haven’t yet seen a material flight to value among our customers but expect value to become more important over the next few years as we emerge from an unprecedented stimulus. ”

He said the company would continue to accelerate its digital division and that it was an increasingly more important part of the business.

 

 

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