Woolworths Raises Annual Profit 4.6%, Sees Cost Pressures Ahead — Update

By Stuart Condie

SYDNEY--Australian supermarket giant Woolworths raised its dividend after a 4.6% rise in annual profit, while warning of the impact of wage increases and energy prices on future earnings.

Woolworths on Wednesday reported a continuing-operations net profit for the 52 weeks through June 25 of 1.62 billion Australian dollars (US$1.04 billion). Revenue rose 5.7% to A$64.29 billion.

Directors declared a final dividend of 58 Australian cents a share, up from 53 Australian cents a year earlier.

Net profit fell 80% on a statutory basis, reflecting the impact of the prior period's demerger of its Endeavour drinks and hospitality business.

Woolworths said that fiscal 2024 costs would show the impact of material wage increases and inflation in energy and transport. Earnings growth for the period should be viewed with that in mind, CEO Brad Banducci said.

Australian food sales were up 6.5% on-year for the first eight weeks of fiscal 2024, Banducci said. New Zealand food sales were up 4.5% over the same period.

Big W department store sales were down by about 6% at the start of fiscal 2024. They rose 8.0% in fiscal 2023, but second-half earnings before interest and tax of A$11 million missed management expectations and fell 64% on year.

"Big W is being impacted by the broader discretionary spending slowdown in Australia," Banducci said.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

August 22, 2023 19:30 ET (23:30 GMT)

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