Woolworths on Thursday published its results for the 52-week period ended 28 June 2020 and, despite a slump in earnings caused by the Covid-19 lockdown, online sales spiked higher.
Group sales were 0.1% lower compared to the prior year and declined by 1.1% in constant currency terms, with the sales performance for the second half significantly impacted by the temporary closure of the majority of the group´s non-food stores, coupled with the decline in foot traffic and resultant loss of trade.
The easing of restrictions from the beginning of May 2020 in South Africa and Australia resulted in some recovery in the last nine weeks of the half. Consequently, group turnover and concession sales declined by 4% in the second half.
However, the loss of trade was partially offset by “significant growth in and contribution from online sales across all businesses during and post the lockdown”.
Online food sales grew by 87.8% in the second half and by 57.2% for the year. Woolworths said this growth was “notwithstanding the need for further improvements to our fulfilment capability in this area”.
In its Fashion, Beauty and Home business, the group was “severely impacted by the closure of stores and the restrictions on trade, including through our online channel for the duration of the lockdown period in South Africa and the other Southern African markets in which we operate”.
Sales plunge
Since the re-opening of stores in May, trade was focused on promotional and clearance activity to drive sales and reduce inventory levels. Sales in the second half declined by 24.1%, ending the year 10.7% down on last year, while online sales in this business grew by 41.3% in the second half and 35.4% for the year.
Its Australian business, David Jones, also saw a sharp uptick in e-commerce. While David Jones was able to continue trading at most of its stores during the lockdown, there was a significant decline in footfall. Again, however, the decline in store sales was partly offset by the shift to online, which grew by over 100% in the second half, contributing 18.4% to sales.
Similarly, Country Road saw online sales remain strong throughout the lockdown, growing by 28.1% in the second half, and contributing 33.5% of total sales.
Woolworths reported a 45.7% decline in adjusted diluted headline earnings per share for the 52-week period. The board elected not to declare a final dividend, with the interim dividend of 89c/share therefore also being the total dividend for the year. — © 2020 NewsCentral Media
