Woolworths shares drop after soft Q3 results
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More news: Shares in Woolworths dropped nearly 4% to $30.55 after the supermarket giant reported a lower than expected 2.8% lift in third quarter sales.
What they said: "While expectations were low, it was a disappointing result with Coles clearly out-trading Woolworths on shorter-term initiatives, Big W weaker and costs to be higher into FY25 from supply chain initiatives that have not previously been guided," Jarden analysts said in a note.
Similarly, E&P analysts also said the result was below their expectations and that the Australian Food business was impacted by Coles "successful Pokemon production" and Woolworths did not run a collectible promotion during the quarter.
Woolworths lifts Q3 sales, flags weak consumer sentiment
The news: Supermarket Woolworths lifted its March quarter sales, led by a solid performance in its foods business, even as consumer sentiment takes a hit amid cost of living pressures.
The numbers: Total sales for the three months to 31 March rose 2.8% to $16.8 billion. Sales at its Australian supermarkets were up 1.5%, and 1.1% on a comparable basis. Supermarket sales rose 1.4% in New Zealand while Big W sales fell by 4.1% in the quarter.
The context: Woolworths supermarket sales lagged those of rival Coles, which earlier this week reported a 5.1% lift in March quarter sales.
Group CEO Brad Banducci said unit volumes had increased but there had been a substantial shift in consumer behaviour since Christmas as cost-of-living pressures increased. He noted food prices dropped 0.2% in the third quarter against a 5.8% increase a year ago.
On Wednesday Woolworths announced it would sell a 5% stake in drinks group Endeavour for $468 million.
What they said: “Our focus for the rest of FY24 remains on providing value for our customers reflecting their cost-of-living pressures," Banducci said.
"We expect trading conditions to be challenging for the next 12 months due to competition for customer shopping baskets and as inflation returns to a very low single digit range."
The source: ASX announcement
