Woolworths reports 16.8% drop in fiscal year profit as shoppers spend less

South African high-end clothing and food retailer Woolworths reported on Wednesday (4 September 2024) a decline in full-year profits as higher living costs continue to weigh on discretionary spending.

Reuters/Siphiwe Agency

Woolworths reported net earnings per share (HEPS) from continuing operations of 352.3 cents, down 16.8% compared with the comparable 52-week period ended June 25.

Including the contribution from Australian department store David Jones in the previous year before the sale and in the 53 weeks to June 30, HEPS fell 29.2 per cent to 364.2 cents.

The retailer also booked a R609m non-cash goodwill impairment on its Australian menswear brand Politix. However, it said this only related to the EPS line and not the HEPS line.

Group turnover and concession sales from continuing operations increased by 4.3% to R76.4 billion, with turnover in the South African fashion, beauty and homeware segment down 0.4% while food segment sales increased by 9%, further supported by the inclusion of the Absolute Pets acquisition.

On a non-comparable basis and on a total operations basis, group turnover and sales fell by 16.4%.

Woolworths, which also operates in Australia and New Zealand through its Country Road clothing business, announced a final profit distribution of 117.5 cents a share, down 23.9 per cent.