The market didn’t like the 4th quarter sales result from Woolworths yesterday, marking the shares down a touch to $27.58 by the close.
Nor did investors appreciate the absence of any mention of earnings guidance, which had been a feature of the 2008 full year sales figures.
Even at the interim sales announcement in late January, the company mentioned that earnings guidance would be given with the half year profit which was issued in late February.
But not a mention of the phrase ‘earnings guidance’ anywhere in yesterday’s full year’s release.
Another dampener was the poor topline growth of 5.4% for the 4th quarter, the lowest for at least two years.
Group sales rose to $11.1 billion in the three months ended June 28.
Lower petrol sales had an impact; it must be said, with fuel prices down on a year ago and sales in the final quarter off 18% from 12 months earlier because of those lower prices.
That probably helped cut overall sales growth in the final quarter from the 9.6% growth figure in the first quarter of the June year when petrol prices were still higher (but starting to fall).
Same store sales for Australian supermarkets, a good guide as to how the company is really travelling, were up 7.9% in the quarter, which was better than forecast by the market.
That was also nicely above the 6% same store sales growth Woolies was getting from its Australian supermarkets in the September quarter of last year, and the 4.9% same store growth in the June quarter of the same year (the final quarter of the 2008 financial year).
It seems the company’s $2 billion plan for store refurbishments in Australia, is gaining traction.
Chief Executive Officer Michael Luscombe said the company "continues to reinvest in all its businesses to improve stores. Despite the global economic turmoil, 2009 has been a successful year with solid results across our business overall".
The company adjusted the sales result for an extra trading week in the year earlier and the timing of Easter.
Full year sales rose 7.5% for the 12 months to $49.6 billion compared with the company’s forecast for annual growth in the “upper single digits".The previous year total sales were up 8.3%. The high petrol prices continue to cloud comparisons.
Total revenue from the core of the business, the Australian supermarkets, rose 9.5% to $7.5 billion in the fourth quarter (for the full year up 9.6% to a record $32.81 billion).
The company’s “2010c” store formats, which feature increased selling space for more profitable fresh fruit and vegetables, is being rolled through the company’s 802 supermarkets and is about 50% complete.
That seems to be driving the faster growth in same store sales, as it is supposed to do. There’s a faster payback in terms of the sales boost and higher profits from store refurbs than from building totally new supermarkets.
Fuel sales fell 18% in the quarter to $1.2 billion on lower prices for petrol.
For the full year, petrol sales were $5.5 billion, a fall of half a per cent over the prior year and indicative of lower petrol price levels.
"Petrol comparable sales (dollars) decreased by 4.3%, however comparable volumes increased 1.2% over the year (FY08: 0.6%)," Woolies said in the statement.
New Zealand supermarket sales rose 1.6% to $A887 million in Australian dollar terms. In the New Zealand currency, the increase was 4.8%.
New Zealand Supermarket sales for the year were NZ $5.0 billion (A$4.0 billion), a 3.9% (in NZD) increase over last year. Comparable sales for the year increased by 3.6%.
Revenue from the Big W discount general merchandise chain jumped 13% to $903 million in the quarter (comparable sales were up more than 11%).
"Big W sales for the full year were $4.3 billion, an increase of 10.5% over the previous year. Comparable sales for the full year were 7.1% (FY08: 4.7%)," the company said.
The consumer electronics unit increased sales 14% to $382 million in the quarter.
"Sales for the full year reached $1.5 billion, a 9.6% increase on previous year, with comparable store sales increasing by 6.3%. Comparable sales were 7.3% in Australia (including 13.4% for the Dick Smith stores – excluding Powerhouse and Tandy) and 2.0% in New Zealand."
Sales at the company hotels business, Australia’s biggest owner of pubs, rose 3.7% in the final quarter to $251 million.
"Hotel sales of $1.1 billion for the year represent an increase of 1.6% with overall comparable sales growth of 0.7%. Comparable gaming sales for the year were up 2.7%," Woolies said.
