Woolies shares gain after sales beat estimates

July 23, 2012

The Age

Woolworths, the country’s biggest supermarket chain, said total sales for its fourth quarter rose 5.1 per cent to $12.9 billion.

Woolies shares rose as much as 35 cents, or 1.3 per cent, to $27.97, compared with a drop of about 1 per cent for the overall market.

The company’s key food and liquor divison saw same-store sales rise 1.3 per cent, beating the 0.5 per cent pace expected by analysts in a Bloomberg survey.

For the full year, sales rose 4.7 per cent to $56.7 billion, with food and liquor sales rising 3.8 per cent to $37.5 billion.

Woolworths has been engaged in a struggle for market dominance with Wesfarmers, the owner of Coles. Wesfarmers’ Coles unit has outperformed Woolworths’ supermarket division for the past 12 quarters.

So far in 2012, though, Woolies shares are up about 12 per cent compared with 8 per cent for Wesfarmers and 3 per cent for the ASX200. Wesfarmers shares were recently down 34 cents, or 1.1 per cent, to $31.70.

Home improvement
Woolies’ home improvement sales leapt 24.7 per cent as the company took on rival Wesfarmers’s Bunning unit, and petrol sales rose 11.4 per cent.

Chief executive Grant O’Brien said the overall result was underpinned by growth in customer numbers, market share and units sold.

‘‘The last quarter, in particular, was a stronger end to what was a challenging year,’’ he said in a statement today.

‘‘Retail conditions remained subdued due to consumer and business uncertainty and an unseasonably cold and wet summer period.’’
BusinessDay, with Reuters, AAP

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