Woolworths (WOW) is likely to enjoy releasing its third quarter sales report later this morning.
After five years of trailing behind rival Coles in terms of same store sales growth, the Sydney-based giant is likely to have regained the lead.
And it is possible that Woolies topline sales growth may top that of Coles, which reported its third quarter figures yesterday in the group report from owner Wesfarmers (WES).
Coles reported overall sales growth of 3.6% for the quarter, with the core food and liquor business group seeing topline growth of 3.9% to $6.7 billion.
Sales for the nine months to the end of March were up 4.7% to $21.7 billion.
Comparable food and liquor sales (one of the key measures in retailing) were 3.5% higher in the quarter, and up 3.8% for the nine months to March.
They were the lowest same store sales figures for two years, and although some analysts claimed the later Easter hurt them, it will also affect Woolies sales figures as well.
Woolworths will go close to topping that, given the momentum it reported in its first half (and especially December quarter figures).
Topline sales in the Australian supermarkets and liquor business were up 4.8% for the six months to the end of December, and 5.1% in the December quarter.
Comparable (or same store) sales grew by 3% for the first half and 3.4% in the December quarter, so if Woolies has maintained that growth in the third quarter (even without Easter), it could go close to regaining the sales growth leadership, which might be what the recent run up in the retailer’s share price has been signalling.
Woolies share price has risen from less than $33 in December to more than $38 this month and a close yesterday of $38.04, when it fell 45c or 1.1%.
In fact Woolies shares have hit a series of all time highs in the past fortnight.
Wesfarmers shares haven’t enjoyed the same strength – they have risen from just over $41 last December to just on $44 this month.
They are still below their previous highs and traded well above $44 last November.
The shares fell 88c or 2% yesterday to $43.01.
WES Vs WOW YTD – Woolies’ return to form costs Coles
The sluggish (by recent standards) report for Coles tended to overshadow solid reports from Bunnings where topline sales for the quarter grew 12.3%, as the hardware giant rode the home building boom. On a comparable store basis Bunnings sales were up a very strong 9.1% in the quarter.
Bunnings’ topline sales for the nine months to March are running 11% ahead of last year, which would have to be the fastest growth of any major retail chain in the country at the moment.
Sales at Officeworks (which are in the same business group) jumped 6.7% in the quarter and more than 5% for the first nine months of the current financial year.
The performance from its two department store chains was again very different. Kmart posted an 0.4% lift in topline sales, while comparable store sales grew 0.7%. For the year so far sales are up 0.2% and 0.3% respectively.
Target continued to struggle though as it tries to negotiate yet an other restructure to improve its operations.
Sales fell 3.6% while they plunged a nasty 5.9% in the quarter on a comparable store basis.
That really was a weak performance. For the financial year so far, Target sales are down 4.8% on a topline basis and 5.2% on a comparable store basis.
