Woolworths reported that its full-year profit was almost flat due to product shortages caused by flooding in New South Wales and Queensland earlier this year, and outbreaks of COVID-19 caused a spike in the number of sick workers who fell ill. they took days off.
The retailer’s net profit from continuing operations rose 0.7 percent to $1.51 billion, a result that fell “below our aspirations,” according to CEO Brad Banducci.
Sales rose 9.2 percent to $60.85 billion in the year ended June 30, and the company will pay shareholders a final dividend of 53 cents a share.
But its COVID-19 costs rose to $211 million (up from $205 million a year earlier).
Woolworths said that, on average, the price of its products rose 3.6 percent between April and June due to “industry-wide input cost pressures.”
Although the price of meat (particularly beef) and vegetables continued to rise due to supply disruptions caused by wet weather and flooding, fruit prices fell in the June quarter.
Woolworths also said the rising cost of living was “beginning to affect all aspects of our customers’ store and we are seeing a gradual shift in customer buying behaviour”.
“Although it is still very difficult to separate them from the COVID-related impacts of the last two and a half years, we are seeing some customers switch from beef to more affordable protein sources and switch from fresh vegetables to more frozen and canned offerings. affordable.”
Conditions ‘volatile and challenging’
As of 10:20am AEST, Woolworths’ share price had fallen 3.1 per cent to $36.24, after its chief executive warned of tough times ahead.
“In summary, we expect the business environment to remain volatile and challenging due to endemic COVID disruptions, ongoing supply chain challenges, higher costs in our business, and cost of living pressures for our customers,” Banducci said in a statement.
“However, we are becoming more agile and determined in responding to these challenges and are focused on improving our underlying operating performance across all aspects of our value chain after three years of disruption.”
In a different measure of full-year earnings, its net profit after significant items rose 283 percent to $7.93 billion.
However, that figure was inflated by Woolworths splitting its Endeavor Group spirits business (owner of the BWS and Dan Murphy brands) into a separate company.
The supermarket giant recognized a one-time profit of $6.39 billion from that restructuring.