Woolworths feels the pain

 ·30 May 2024

Woolworths is expecting a significant drop in earnings following the disposal of David Jones, but the pain consumers face is also not helping.

In a trading statement, the group said that its results for the 53 weeks ending 30 June 2024 would not be comparable to the prior period as it disposed of David Jones operations in Q3 of the 2023 financial year.

Earnings per share, headline earnings per share, and adjusted diluted headline earnings per share for the current period are expected to be over 20% lower than the prior period due to the inclusion of the David Jones business and the profit on disposal in the group’s 2023 results.

“At the time of releasing our interim results, our outlook for the second half of the 2024 financial year was expected to remain challenging, considering the continued pressure on consumer disposable income from high interest rates and living costs,” said the group.

“Trading conditions in the second half to date have, however, proven tougher than expected for our apparel businesses, with further deterioration in footfall and discretionary spending in both geographies (South Africa and Australia).”

“Whilst costs remain well controlled across the Group, the impact of a weaker top-line environment is resulting in continued negative operational leverage in our apparel businesses.”

The Country Road Group is being impacted by inflated import costs due to a weaker AU$, coupled with higher fixed costs.

That said, the group’s food business is proving resilient, with strong trade and market share gains.

The group will issue a further trading statement and release its results on roughly 4 September 2024.

Read: What you need to save to send your child to university in South Africa – starting from when they’re born

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