Shares in the country’s biggest retailer, Woolworths (WOW) were easier all day yesterday after the release of mixed 4th quarter and full year sales data.
The shares traded around 1.5% to just over 2% easier fall day and finished off 1.6%, or 55c at $33.22.
That was on a day when the wider market was flat – so investors didn’t really take a shine to the Woolies news.
The retailer said that full year sales from continuing operations were $58.5 billion, an increase of 6.8% on the previous year or 4.8% after adjusting for the 53rd week in 2012-13.
And, sales for the fourth quarter from continuing operations were $14.1 billion, up 12.7% on the previous year or 4.3% after adjusting for Easter and the 53rd week.
Analysts said the figures were OK, but the 4th quarter data from the BIG W department store chain was weak, thanks to poor (warm and damp) weather conditions in many markets.
CEO Grant O’Brien also strongly rejected criticism from the ACCC about its shopper docket scheme of giving petrol discounts to customers for spending certain amounts in Woolies supermarkets and grog shops. Coles has the same scheme and on Monday the competition regulator said they were getting out of hand at 45 cents a litre discount and endangering competition.
Mr O’Brien yesterday rejected that saying the discounts benefited families.
From the data provided on petrol sales yesterday, the shop a docket discounts certainly aren’t driving sales to any degree and seem more designed to maintain volumes than anything else.
WOW vs WES 1Y – Woolies sales gets mixed reception – OK, but ….
In a statement yesterday Mr O’Brien also said: "The progress made in the 2013 financial year on our program of transformation for Woolworths Limited has been rewarded with a strong sales result. Momentum continues to increase in Australian Food and Liquor with comparable sales growth for the second half higher than the first half and the prior year.
"The result demonstrates the benefits that have been gained from a sharpened focus on our core businesses and results from the implementation of our Strategic Priorities.
“We have achieved solid full year sales growth, which is particularly pleasing when measured against challenging retail conditions and an economic environment underpinned by consumer uncertainty and low growth in disposable income. The fourth quarter result was pleasing given these challenging economic conditions were particularly evident as the quarter progressed."
In its sales report Woolies said that the performance in its most important business, the food and liquor operation in Australia, improved as the year went on.
Australian Food and Liquor sales for the year were $40.0 billion, up $2.5 billion or 6.6% on the previous year (4.7% adjusted for the 53rd week). Sales for the fourth quarter were $9.6 billion, an increase of 12.2% on the previous year (4.4% adjusted for Easter and the 53rd week). (All the sales increases are on a top line basis).
On a comparable store basis, sales in Australian Food and Liquor increased 2.7% for the year and 2.9% for the fourth quarter after adjusting for Easter. Comparable sales growth for the second half of the financial year was 3.0%, against a 2.4% increase in the first half and 1.1% increase in the previous year.
New Zealand Supermarket sales for the year were NZ$5.7 billion, an increase of 4.1% on the previous year (6.9% increase in AUD) or 2.3% adjusted for the 53rd week (5.0% in AUD). Sales for the fourth quarter were NZ$1.4 billion, an increase of 10.6% on the previous year (17.0% increase in AUD, as the NZ dollar firmed against the weakening Aussie) or 2.4% adjusted for Easter and the 53rd week (8.3% in AUD).
But on a comparable store basis, sales for the year were flat and after adjusting for Easter, were flat for the fourth quarter. This compares to a 0.8% fall in comparable sales in the second quarter of the year and a fall of 0.1% in the third quarter (adjusted for Easter).
Petrol sales for the year, including Woolworths/Caltex alliance sites, were $6.8 billion, up 1.2% on the previous year (but a fall of 0.8% adjusted for the 53rd week). Sales for the fourth quarter were $1.7 billion, an increase of 6.1% on the previous year (a fall of 2.5% adjusted for Easter and the 53rd week). This was impacted by lower average fuel selling prices for the quarter (4th quarter of 2012-13: 141.7 cents per litre against 146.8 cents in the 4th quarter of 2011-12.
But comparable (dollar) sales fell 2.3% for the year and decreased 2.4% for the fourth quarter after adjusting for Easter. Comparable volumes were down 2.9% for the year and 0.5% for the fourth quarter after adjusting for Easter. So no growth there from the discount schemes.
Total merchandise (non-fuel) sales increased 8.3% for the year (6.4% adjusted for the 53rd week) and increased 14.5% for the fourth quarter (7.6% adjusted for Easter and the 53rd week).
Comparable store merchandise (non-fuel) sales increased 2.4% for the year and increased 4.7% for the fourth quarter after adjusting for Easter. The strong performance in merchandise sales has been driven by improved ranging and relevant, successful promotional activity, according to yesterday’s report.
BIG W sales for the year were $4.4 billion, an increase of 4.9% on the previous year (2.0% adjusted for the 53rd week).
Sales for the fourth quarter were $973 million, up 9.7% on the previous year. But adjusting for the impact of the 53rd week, which included the launch of the group’s annual Toy Sale event, and for the timing of Easter, sales for the fourth quarter were down 2.2%.
Hotel sales for the year were $1.5 billion, up 22.0% on the previous year or 19.7% adjusted for the 53rd week. Sales for the fourth quarter were $357 million, 30.8% up on the previous year or 19.6% adjusted for Easter and the extra week. Comparable sales for the year increased 10.5% and increased 11.9% for the fourth quarter after adjusting for Easter.
Home Improvement (Masters and Danks) sales for the year were $1.2 billion, an increase of 49.6% on the previous year (46.7% adjusted for the 53rd week). This included Danks sales of $710 million, up 4.1% on the previous year and Masters sales of $529 million, up 262% on the previous year on a 53 week basis.
Sales for the fourth quarter were $312 million, an increase of 52.2% on the previous year or 40.5% adjusted for Easter and the extra week.
Woolies reports its full year profits late next month.The company has already said net profit after tax will be up 5%-6% per cent for 2013 but part of that will be a one-off gaming profit of $100 million from regulatory changes in Victoria.
