What revved up Woolworths’ sales in  ‘most challenging COVID-19 quarter’?

Highlights

  • Woolworths Group’s sales rose8% in the first quarter as people stocked up on food during the coronavirus lockdowns.
  • Total group sales from continuing operations came in at AU$16.07 billion (US$11.99 billion) in the first quarter.
  • Woolies said that extended lockdowns benefitted the company’s food business as customers consumed more at home.

Woolworths Group Ltd (ASX:WOW) on Wednesday announced that its sales rose 7.8% in the first quarter of the financial year 2022 as people stocked up on food during the coronavirus lockdowns.

Australia’s largest supermarket chain said that the total group sales from continuing operations came in at AU$16.07 billion (US$11.99 billion) in the first quarter, against AU$14.91 billion a year ago.

According to Woolworths, Q1 FY2022 was “the most challenging COVID quarter”, as lockdowns disrupted the supply chain and stores in Victoria and New South Wales (NSW).

What helped Woolworths’ sales in the ‘most challenging COVID quarter

However, extended lockdowns benefitted the company’s food business as customers consumed more at home. It resulted in the company’s Australian food sales growing by 3.9% and New Zealand food sales rising 9.7% during the quarter under review.

Woolworths reported a record e-commerce sales penetration of 12.4%. The group e-commerce sales were 53.5% higher.

On the other hand, Big W sales fell 7.5% due to store closures and trading restrictions. The company said that Big W’s upcoming financial results will be highly dependent on the Christmas period on account of recent closures and restrictions.

In October, the Australian food sales have slowed down as NSW lockdown restrictions have eased. On the other hand, Big W sales trends have improved as Greater Sydney stores reopen.

The company also said that its outlook remains uncertain since there were likely challenges in the weeks ahead.

Meanwhile, Woolworths’ stock closed at AU$40.470 on Tuesday. Over the past 12 months, Woolworths shares have gained more than 24%, and are up over 19% year to date.

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