Woolworths Group Reported Improved Sales Momentum in Q3 FY19

Australia’s leading retailer, Woolworths Group Limited (ASX: WOW) has witnessed improvement in the sales momentum across the Group in the third quarter of FY 2019.

In an update provided on 2 May 2019, the company informed about the improvement in its Australian Food’s sales momentum during the third quarter with Easter-adjusted sales growth of 4.7%, enjoying benefits from lower deflation and more settled weather. Along with Australian Food, the sales of Woolworths’ Endeavour Drinks and BIG W also increased significantly during the period. After the challenging first half, the news of this improved sales momentum is very encouraging for the company. In its Endeavour Drinks’ segment, the company reported Easter-adjusted comparable growth of 5.9%.

While providing the results of the first half, the company had informed about the unsettled weather which negatively impacted the sales across all of the company’s businesses. Now with more settled weather across key trading states and with the timing of New Year’s Eve, the sales of Endeavour Drinks have rebounded but despite that, the company expects Endeavour Drinks’ EBIT for F19 to be lower than the prior year as it is investing in improving its range, service and convenience for its customers.

Woolworths’ BIG W segment witnessed Easter-adjusted comparable sales growth of 7.4% underpinned by strong transaction growth but despite this, BIG W is currently expecting to report a loss before interest and tax of 80-$100 million in F19.

The group recently announced a $1.7 billion off-market buy-back. Opened only to Eligible Shareholders in Australia and New Zealand, the buy-back opened on 16 April 2019 and it is going to close on Friday, 24 May 2019, as per the company’s announcement.

In the last three years, the company has invested over $1 billion in bringing down the prices of its products, to make them more affordable and it has also invested hundreds of millions in enabling customers to shop with Woolworths in a way that is convenient to them.

Along with improved operational performance, the company’s stock performance is also worth noting with over 11% increase in its share price over the course of the last six months.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock traded at a price of $32.840, up by 1.893% during the day’s trade with a market capitalisation of ~$42.26 billion as on 3 May 2019. The counter opened the day at $32.480 and reached the day’s high of $32.890 and touched a day’s low of $32.270 with a daily volume of ~ 2,651,721. The stock has provided a year till date return of 9.67% & also posted returns of 11.39%, 8.59% & 2.86% over the past six months, three & one-month period respectively. It had a 52-week high price of $32.890 and touched 52 weeks low of $27.030, with an average volume of ~3,235,254.


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