Woolworths Group Ltd.’s (ASX: WOW) shares uplifted by 0.95 percent following the announcement of its September quarter sales results on 1 November 2018. The total sales from continuing operations increased by 1.9 percent to $14.8 billion in Q1 FY19 compared to the corresponding previous period. The Australian Food sales of the company in Q1 FY19 increased by 1.9 percent to $9.9 billion with comparable sales increasing by 1.8%. The Australian Food business of the company faced some challenges in the starting of the quarter with sales getting impacted by the customers’ and team’s adjustment to the removal of single-use plastic bags as well as the impact of a competitor continuity program. However, the online sales in Australian Food remained strong and increased by 26 percent on last year, due to the popularity of Pick up, continued improvement in the online experience and increasing customer engagement across all digital channels.
During the first quarter of FY 2019, four Woolworths supermarkets were opened in the Renewal format and one was closed with a total fleet size of 1,011 at the end of the quarter. The Endeavour Drinks’ sales increased by 3.0% in the Q1 FY19 to $2.1 billion with comparable sales increasing by 1.7%. Due to the slowdown in the market growth, particularly in wine, the comparable sales growth was below recent trends.
The New Zealand Food Sales increased by 2.6 percent to $1.7 billion despite an increase in deflation in the quarter compared to the prior year. Sales were also impacted by the closure of three stores in the second half of FY 2018 and one in the first quarter of FY19 due to store rationalization. The New Zealand Food’s online sales remained strong in the quarter and increased by 40 percent on last year on the back of strong growth in Pick up.
The Big W sales increased by 1.3 percent to $902 million with comparable sales growth of 2.2 percent which was supported by item growth of 6.0% in the quarter driven by a 4.1% increase in items per basket. The online sales increased by 177% in Q1 2019, driven by the popularity of Pick up. Online sales were also supported by an increase in the number products available online, as well as continuous improvements to the website to upgrade the search experience for customers. The total sales for Hotels grew by 0.5% in the quarter to $443 million with comparable sales increasing by 1.2 percent.
Petrol sales increased by 8.2 percent to $1.3 billion in the quarter with comparable sales growth of 8.1%. While sales benefitted from the higher petrol prices, volumes were impacted by lower tank fill sizes and competitor site openings.
The update was well above market estimates and helped in boosting the stock a bit. In the last six months, the share price of the company increased by 2.49 percent as on 31 October 2018. WOW’s shares traded at $28.700 with a market capitalization of circa $37.45 billion as on 1 November 2018.
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