Woolworths Group’s New Zealand business, Countdown, reported a 12.5 per cent dive in EBIT last year, citing a “very challenging” second half due to the impact of the Covid Omicron strain which led to movement restrictions and interrupted the supply chain.
In the Australian retail group’s results announced Thursday, the company said New Zealand sales rose by 5.8 per cent, but during the second half, growth was 3.1 per cent and in the fourth quarter just 2.3 per cent.
The most successful of the New Zealand business’ channels was e-commerce, where sales surged 19.7 per cent to NZ$1.03 billion. The core Countdown business saw store-originated sales rise 3.6 per cent to $5.9 billion, while the SuperValue and FreshChoice stores, along with other revenue, rose by 7.4 per cent to $628 million.
Meanwhile, Woolworths Group’s overall sales rose by 9.2 per cent to A$60.85 billion, with e-commerce revenues up 39 per cent to $6.26 billion. The company reported EBIT of $2.69 billion, down 2.7 per cent year on year, and a net profit attributable to shareholders of $1.514 billion, up $10 million on year.
CEO Brad Banducci said an “extremely challenging operating environment” had resulted in a financial performance that was below aspirations for the year, citing supply chain disruptions, product shortages, team absenteeism and flooding which had led to an “inconsistent customer experience”. However, he said he was proud of how Woolworths staff continued to care for its customers and each other and said an ongoing resilience had delivered a strong Christmas and an improved trading momentum during the second half of the year.
“I am confident that, as we enter F23 with a renewed sense of purpose, we will be able to navigate ongoing uncertainties and challenges to deliver for all of our stakeholders,” he said.
By division, the core Woolworths retail business improved sales by 4.3 per cent, driven by a 33.6 per cent boost online, with second-half sales up 5.5 per cent.
Big W sales fell by 3.3 per cent for the year to $4.43 billion, with EBIT plunging 68.2 per cent to $55 million. The company said trading was impacted by multiple stores being closed for an extended period due to Covid restrictions. Growth recovered strongly during the second half, with fourth-quarter sales up by 11.9 per cent.
