Woolworths Holdings, South Africa’s biggest retailer by market value, said full-year profit climbed 24 per cent, beating analyst expectations, as the company gained market share and performance improved at newly acquired Australian chain David Jones.
Net income at the seller of organic foods and international clothing brands such as Country Road rose to 3.75 billion rand ($286 million) in the year through 28 June, the Cape Town-based company said in a statement on Thursday. That compares with the 3.65 billion rand estimate of six analysts surveyed by Bloomberg. Sales gained 42 per cent to 56.5 billion rand, including the David Jones purchase.
Woolworths bought David Jones for about $2 billion last year to expand across the southern hemisphere. South African shopping chains have been facing nationwide unemployment of 25 per cent, power shortages and rising inflation that stifles consumer spending. Trading for the first eight weeks of the new financial year has been “positive,” the company said.
“We believe that economic conditions in South Africa & Australia will remain constrained, especially in the lower and middle-income segments of the market,” Chief Executive Officer Ian Moir said in the statement. “The upper-income segments in which we operate continue to show some resilience.”
Food sales gained 14 per cent, while clothing revenue increased 9.6 per cent. Strong second-half trading at David Jones lifted that unit’s full-year sales by 6.4 per cent.
Woolworths shares have climbed 28 percent this year, the best performing major retailer on the FTSE/JSE Africa General Retailers Index. The company is valued at 94.6 billion rand.
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