SOUTH AFRICA – Woolworths Holdings Limited (WHL) has reported robust financial results for the first half of the 2024 fiscal year, recording a double-digit profit growth despite undergoing a complex macroeconomic environment and facing challenges from the previous year.
WHL Group CEO, Roy Bagattini, expressed satisfaction with the company’s performance, emphasizing the strength of their diversified portfolio, resilient brands, and the dedication of their teams.
“Our results have again highlighted the benefit of our diversified group, the strength of our brands, and the passion and commitment of our dedicated teams,” Bagattini stated.
“I firmly believe that we have proven ourselves to be a resilient organization, focused on formulating clear strategies and executing against them, to deliver more for our customers and more to our shareholders.”
He revealed that the financial period faced headwinds from an increasingly challenging macroeconomic environment, marked by sustained interest rate increases and higher living costs.
In South Africa, Woolworths faced additional disruptions due to almost daily load-shedding, port congestion, and the Avian flu affecting key food product lines.
Despite these challenges, Woolworths Food demonstrated solid growth, boasting the highest like-for-like sales growth in the sector. Turnover and concession sales increased by 8.4% and 7.2% on a comparable store basis, reflecting the resilience of the brand.
Woolworths successfully navigated product inflation, averaging 9.1%, by strategically investing in pricing.
The last six weeks of the period ending December 24, saw a sales growth of 8.6%, accompanied by positive volume growth as product inflation eased to 7.9%. Online sales played a significant role, surging by 46.6%, contributing 5.1% of South African sales.
The company’s gross profit margin increased by 80 basis points to 24.6%, driven by targeted promotions and value chain efficiencies.
Adjusted operating profit showed a substantial growth of 13.0%, reaching R1,595 million, resulting in an operating profit margin of 7.0%, up from 6.7% in the prior period.
Adjusting for the impact of load-shedding, the operating profit grew by 13.2%, with a corresponding operating margin of 7.3%.
Additionally, Woolworths Holdings Limited reported a half-year sales figure of ZAR 37,930 million compared to ZAR 35,860 million a year ago, with revenue reaching ZAR 37,536 million compared to ZAR 35,703 million.
Net income for the period was ZAR 1,818 million, reflecting a decrease from ZAR 2,733 million a year ago.
Basic earnings per share from continuing operations amounted to ZAR 2.029, down from ZAR 2.937, while diluted earnings per share from continuing operations were ZAR 2.009 compared to ZAR 2.893 a year ago.
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