Woolies Up, Despite Dick Smith Sale

Woolies on the up, with Masters, Big W and Food sales rising
Woolworths total sales from continuing operations was up 4.8% for first half fiscal 2013 (H1) despite the loss of the Dick Smith electronics chain in November, which it sold to Anchorage Capital Partners for just $20 million.

Read: Dick Smith Sold To Equity Group $20M

Sales from ‘Discontinued Operations’ which includes Dick Smith was $436 million (and NZ$115 m for NZ business) for the period July -27 December last – almost half of the $731 m figure it enjoyed the same time 2012.

Woolworths also confirmed a final write-off adjustment of $66 million in relation to the sale of both Dick Smith and its Consumer Electronics business in India to Infiniti Retail.

Its Big W  stores, one of the biggest resellers of Apple products in Oz, recorded H1 sales of $2.4 billion, a 3.6% jump on the previous year.

Store sales for the second quarter were $1.3 billion, up 1.6%. Comparable store sales for the half year increased just 0.7%, but fell 1.4% in Q2.

The flat result was impacted by “continued declines in the Consumer Electronics category and by ongoing deflation across the business”, estimated to be almost 5% in H1, Woolies said.

However, there was solid growth in customer numbers and units sold and Big W also did well in Small Appliances

“BIG W trading over the Christmas period was pleasing with a successful Christmas campaign combined with a strong first quarter, delivering strong top line sales growth and positive comparable sales growth for the first half,” said Julie Coates, Director of BIG W.

Coates also said “innovation and newness in our merchandise offer continues to drive sales and remains a ‘key focus.’

“A strong Christmas campaign assisted momentum in a challenging second quarter,” admitted Woolworths CEO Grant O’Brien.

Woolies Food and Liquor sales increased 4.7%, or $0.9 billion, with growth in customer numbers and increased market share.

Home Improvement sales including its new Masters chain increased a massive 54.6% to $637 million for the half year and was up 48% to $332 million for Q2.

Woolies online sales increased 40% for the half year, indicating the “ongoing success of our multi-option strategies across all our businesses.”

 

“This solid first half result is a reflection of the sharpened focus on our core businesses and better meeting our customers’ needs,” said O’Brien.

However, he added the retail group was pursuing a “transformational path” and “there is still a great deal more to do.”

Despite the good result, company shares dropped -1.58% on the ASX this afternoon to $31.50