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Woolworths’ resilience shines through: Double-digit profit growth in challenging times

Woolworths ally customers fears about Coronavirus. Pic Woolworths

Woolworths Holdings Limited (WHL) achieved a strong result despite facing a challenging macro environment and tough prior-year comparisons.

In a statement on Wednesday, Group CEO Roy Bagattini emphasized the company’s resilience and the dedication of its teams, highlighting clear strategies and commitment to customers and shareholders.

Bagattini mentioned that the company encountered obstacles such as a challenging macro-economic climate, lower footfall, and discretionary spending in its markets, as well as disruptions like load shedding, port congestion, and the Avian flu outbreak in South Africa.

However, Woolworths remained a top competitor in the South African market, achieving double-digit profit growth, particularly in its Food division, which demonstrated impressive resilience with the highest like-for-like sales growth in the sector.

The company’s success was supported by an increase in gross profit margin, strategic promotions, and value chain efficiencies.

Despite challenges in the South African economy, the Fashion, Beauty, and Home division made steady progress towards strategic goals, with a focus on full-price sales and online growth.

Bagattini also mentioned that the financial services division, WFS, experienced growth in new accounts and credit card advances, with a healthy impairment rate. In the Australian and New Zealand markets, the Country Road Group encountered challenges, but the Country Road brand continued to lead in key categories, with growth in online sales.

Overall, Woolworths Holdings Limited delivered a resilient performance in a challenging environment, demonstrating the strength of its diversified group and the dedication of its teams.

The turnover and concession sales experienced a 5.4% increase, reaching R38.1 billion, and an interim dividend of 148 cents per share has been declared.

The brand further strengthened the trust placed in it by making ongoing investments in price and intensifying the focus on the customer.

The Group’s businesses have made continued progress against their strategies, leading to improved operational and financial health, despite the challenging macro-economic environment.

The strong balance sheet has been further bolstered by the transformational sale of David Jones, providing the capability to accelerate growth initiatives across a number of newer categories, formats, and adjacencies.

Furthermore, the company said there are plans to reinvest R10 billion over three years in support of strategic initiatives.

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