This could force Woolworths to potentially dump its tradition of providing profit guidance at its full-year results, with this year’s projection of net profit rising 4 per cent to 7 per cent in fiscal 2015 potentially the last time it would deliver an earnings forecast to the market.
Gross margins rose to 25. 19 per cent from 25. 1, while the cost of doing business eased by 6 basis points. This made up for a 20. 1 per cent slide in earnings for Big W to $152. 9 million and a $169 million loss for its home improvement division which is dominated by Masters and signalled to the market this month.
But while Woolworths was busy behind the scenes investing millions into Big W to transform the entire business and scurrying to drag Masters out of the red, Australia‘s economic framework was still too fragile to support robust consumer expenditure.
Mr O’Brien said much of the hard work had been done at Woolworths supermarkets, meeting strategic goals he set in November 2011 when only one month in the role he pledged to investors to return the days when Woolworths could brag double-digit profit growth.
Woolworths chief Grant O’Brien will turn his attention to the problem children of the retail empire, its loss-making Masters hardware joint venture and limping Big W chain, as he awaits a bounce in confidence that will prod consumers to open their wallets again and fill their shopping baskets.
Food and liquor sales from its core Australian supermarkets increased 4. 9 per cent to $48. 23 billion as pre-tax earnings were up 5. 3 per cent at $3. 368 billion.
Read more here: SMH