Early signs of transformation.

Woolworths sales have hit $29.8 billion for the half year – an increase of 3.8% on the previous corresponding period. Earnings before interest and tax (EBIT) jumped 9.9% to $1.43 billion and net profit after tax (NPAT) was up 14.7% to $902 million.

Woolworths Group CEO, Brad Banducci said, “At the end of FY17, we said that we were moving from turnaround to transformation. In the current half we have seen some early signs of this transformation with good progress on a number of strategic initiatives and pleasing sales growth from all of our businesses.”

In Australian Food, sales increased by 5.1% and EBIT was up 11.1% due to strong sales and continued improvement in stock loss despite investment in key strategic initiatives including digital, incremental team training and IT as well as higher depreciation costs.

Big W’s sales performance improved in the half, albeit with more modest growth in the second quarter with a focus on lowering prices, which has driven higher volumes but at a lower average selling prices with gross profit dollars largely unchanged.

Sales for the half were $2 billion, an increase of 1.1% on the previous year with comparable sales up 1.3%. By the end of the half, a light refresh of 121 stores (two thirds of the network) was completed and continued investment in price, brand and marketing initiatives led to improving customer scores. Investment in Big W’s digital platform delivered an increase in online sales penetration.

Woolworths currently expects the Big W loss for FY18 to be in the range of $80 million and $120 million.