Woolworths shares climbed the most in almost two years after the South African food and clothing retailer said that an improved performance by Australia’s David Jones helped offset slower growth in its home market.
Strong second-half trading at David Jones, bought last year for about $2 billion, lifted the unit’s full-year sales by 6.4 per cent, Cape Town-based Woolworths said in a recent statement. Excluding the Australian retailer, sales for the 52 weeks through 28 June climbed 12 per cent, compared with 14 per cent a year earlier.
“The results at group level were in line with my expectations, but the David Jones numbers show that the Woolworths management team have been able to turn that business around,” Alec Abraham, an equities analyst at Johannesburg-based Sasfin Securities, said by phone.
The seller of organic foods and clothing brands such as Country Road bought David Jones to help create a southern-hemisphere retail giant. South African shopping chains have been struggling to grow sales at home, as unemployment of more than 26 per cent, power shortages, and rising inflation stifles consumer spending.
Woolworths shares climbed as much as 6.5 per cent, the biggest gain since August 2013.
News by Bloomberg, edited by ESM