Another major pre-June 30 data dump from a major Australian company with Woolworths reporting big write-downs of more than $600 million, solid sales growth in recent weeks, preliminary earnings, more bad news on its employee underpayment scandal, job losses and three-quarters of a billion dollars to be spent on two huge distribution centres.
More retailers have closed their doors to limit the impact of the COVID-19 virus. Myer is standing down 10,000 staff straight away, Kathmandu is closing 170 outlets while South African controlled - David Jones is shutting 280 of its fashion brand stores including Country Road, Witchery, Mimco, and Politix.
Jewelry chain, Michael Hill has become the first major Australian retailer to close its doors in light of the coronavirus pandemic, meaning the jobs of thousands of workers are at risk. Meanwhile, Woolworths has postponed its drinks demerger, Retail Food Group has dropped its guidance as has Shaver Shop.
Woolworths has declared it cannot accurately forecast the impact of the virus on its full-year result. A trading update revealed strong recent sales growth on consumer hoarding, nonetheless leading to strain on supply chains to keep up with demand. Management noted, however, mayhem seemed to be easing last weekend.
Credit Suisse assesses a de-merger of Endeavour Drinks would enable a reinvestment strategy independent of Woolworths. Hotels & liquor retail generate lower returns on capital than the supermarket business.