Big W was a dominant player in Woolworths’ latest financial results recording its third straight year of double digit growth in revenue and earnings. Dick Smith and the Consumer Electronics market also had positive reports.
According to the latest earnings report issued to the ASX, Big W had a sales increase of 10.5 per cent to $4.26 billion in the 52 weeks ending 28 June 2009. In addition to this it also had comparable sales of 7.1 per cent and EBIT grew faster than sales, increasing by 25.9 per cent to $200.2 million.
These results are very positive for the retailer, which has had a significant repositioning over the last three years. According to the report these changes have strengthened the Big W brand and gained strong support from customers.
“The repositioning of our offer over recent years ensured we were well placed to take advantage of the government stimulus packages during FY09,” said the company in a statement.
“In the current environment the consumer is focussed on value and we are confident that the customers that have shopped with us have recognised the Big W value proposition. We continue to maintain Big W’s everyday low price position and continue to lead the market on price.”
It was also announced that 12 refurbishments have occurred throughout the year and roughly the same number are expected to take place throughout FY10. In addition to this five new Big W stores were opened last year taking its total to 156 stores.
In terms of Consumer Electronics in Australia and New Zealand the results were positive, but due to extensive rebranding and repositioning of the business, results weren’t as good as some of the other Woolworths subsidiaries.
According to the results, sales across the consumer electronics division for the full year reached $1.5 billion a 9.6 per cent increase on last year, with comparable store sales increasing by 6.3 per cent. Comparable sales for just the Dick Smith brand were up 13.4 per cent.
Overall EBIT was down for the year but the CE business performed a solid turnaround in the second half, with EBIT growth of 54 per cent on last year.
According to the release the new Dick Smith format is performing well with sales growth in the 77 completed stores.
The transition from Powerhouse over to Dick Smith is set to be completed over the next month and in the next two years it will transition out of the Tandy brand.