Woolworths Reports Annual Profit Rise

Australian supermarket giant Woolworths has announced a 4.6% increase in annual profit, leading to an increase in dividends. However, the company also warned about the impact of future wage increases and energy prices on its earnings.

In the 52 weeks ending June 25, Woolworths reported a net profit of AUD 1.62 billion, a growth of 4.6%. The revenue also rose by 5.7% to AUD 64.29 billion during the same period.

Directors declared a final dividend of 58 Australian cents per share, up from 53 Australian cents last year.

However, on a statutory basis, the net profit fell by 80% due to the demerger of its Endeavour drinks and hospitality business.

CEO Brad Banducci explained that the company expects the costs for fiscal year 2024 to be impacted by significant wage increases and inflation in energy and transport. He advised that any earnings growth during this period should be considered within this context.

Australian food sales for the first eight weeks of fiscal year 2024 saw a rise of 6.5% compared to the previous year. In New Zealand, food sales also increased by 4.5% during the same period.

On the other hand, Big W department store sales experienced a decline of approximately 6% at the beginning of fiscal year 2024. In fiscal year 2023, these sales had increased by 8%, but second-half earnings before interest and tax fell short of management expectations, declining by 64% compared to the previous year, amounting to AUD 11 million.

This decline in Big W's performance is attributed to the broader decline in discretionary spending across Australia.