Despite Big W burden.
Woolworths Limited has reported a 3.7% increase in sales to $55.48 million and a 4.9% decline in earnings before interest and tax (EBIT) to $2.33 million. However, Big W reported sales of $3.6 billion, a decrease of 5.8% on the previous year with comparable sales declining 5.7%, primarily a function of a continued multi-year decline in transaction count and deflation largely driven by clearance and discounting.
In a statement to the ASX, Woolworths Group CEO, Brad Banducci said, “FY17 was a year of rebuilding the foundations of our business and we are pleased with our progress over the last 12 months, particularly in the second half. We still see many opportunities to improve our business going forward and are focused on our five key priorities.”
Australian Food Sales increased by 4.5% over the year with the fourth quarter the strongest at 7.2%. Comparable sales increased by 3.6% for the year and 6.4% Easter adjusted in the fourth quarter. EBIT for the year declined by 2.4% but increased by 13% in H2’17.
“Big W loss before interest and tax of $150.5 million was extremely disappointing but also reflects the investment we began to make in the second half as we implement our new turnaround plan, which has been approved by the Board and its implementation is underway.
“David Walker was appointed managing director of Big W after acting in the role since November 2016. FY18 will continue to be a year of investment and we do not expect a reduction in losses as we continue to invest to improve the customer shopping experience,” the statement said.
Home Improvement sales declined in FY17 compared to the prior year following the closure of Masters stores in December 2016 and the sale of Home Timber & Hardware Group to Metcash in October 2016.
On 4 August, Lowe’s one third share in the Home Improvement joint venture was acquired for $250.8 million. We expect to complete the Home Consortium transaction in late September which will finalise the sale of 61 freehold properties and the transfer of 20 leaseholds to Home Consortium.
“In summary, we are pleased with the progress we made in FY17 and are excited about our ability to further improve our business and customer and team experiences in FY18. We are moving from a turnaround phase, focused on fixing our business foundations, to a transformation phase, focused on leveraging team work, digital and insights to materially improve our business. I would like to thank our entire team for their efforts over the last 12 months and look forward to their support in FY18,” Banducci said.