Woolworths Group (ASX:WOW) marks a strong start to FY21, online sales and net profit go higher

Woolworths Group Limited (ASX:WOW) shared its FY21 half year results for the 27 weeks ended 3 January 2021.

Following are the key takeaways from the results announcement:

  • Group sales increased by 10.6% in the concerned quarter to touch $35.8 billion backed by strong sales growth across all the businesses run by the Company except that of Hotels.
  • The food and everyday needs businesses benefitted as the consumers were more at home and were engaged in COVIDSafe shopping. Australian Food, Big W and Endeavour Drinks – all registered huge gains.
  • WOW’s eCommerce sales rose by 77.9% to $2.9 billion during the concerned period.
  • Average weekly traffic to WOW’s digital platforms rose 62.4% to reach 20.2 million visits per week.
  • Group’s gross profit, however, sank by 29.4% despite almost all businesses reporting profits except that of the Hotel business and the Group’s overall profit saw a decline, thanks to COVID impact.
  • Company’s Cost of Doing Business (CODB) declined by 22 bps due to change in business mix as there was a drop in hotel sales.
  • Finance costs fell by 6.4% to $412 million, mostly because of fall in non-lease interest costs as a result of lower average net debt and interest savings.
  • Australian Food total sales for the half shot up 10.6% to $23.4 billion.

Woolworths Group CEO, Brad Banducci said that Group sales during the first seven weeks of H2 FY21 were quite powerful, courtesy at-home consumption. However, people not able to travel overseas and bushfires impacted the growth rate, but it remained around moderate levels.

Meanwhile, the WOW stock was performing in green at $39.520 per share, with market capitalisation at $49.46 billion at 12:15 PM AEDT.