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Woolworths Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1929/001986/06
LEI: 37890095421E07184E97
Share code: WHL
Share ISIN: ZAE000063863
Bond Company code: WHLI
('the Group')
TRADING UPDATE AND TRADING STATEMENT IN RESPECT OF THE 26 WEEKS ENDED 24 DECEMBER 2023
TRADING UPDATE
GROUP
The Group's turnover and concession sales from continuing operations (i.e. excluding David Jones, which was
disposed of in the prior year) for the 26 weeks ended 24 December 2023 ('current period' or 'period'), increased
by 5.4%, and by 4.4% in constant currency terms. This should be considered in the context of the high prior period
base, in which sales from continuing operations grew by 12.5%, driven in part by the post-Covid pent-up demand
in Australia. During the last six weeks of the period, which included trade during the key festive season, sales
growth accelerated to 7.2%, supported by our robust trade plans.
As mentioned in our 20-week update released on the JSE Limited's Stock Exchange News Service ('SENS') on 15
November 2023, performance for the current period has been impacted by an increasingly challenging macro-
economic backdrop, given the sustained effect of interest rate increases and higher living costs. This has
negatively impacted footfall, resulting in a greater-than-expected pullback in discretionary spend in both
geographies. In South Africa, our business operations were further disrupted by higher levels of loadshedding,
congestion at the ports, and the impact of Avian flu on the availability of key food product lines.
Group turnover and concession sales (including the six-month contribution of David Jones in the prior period,
which is therefore non-comparable) decreased by 23.6% on the prior period on a total basis.
WOOLWORTHS
The economic environment in South Africa remains challenging, exacerbated by the country's energy and
logistics crises, which continue to impact both business and consumer confidence. Whilst we have limited control
over the macro environment, our unwavering commitment to quality, the ongoing investment in our value
proposition and intensified focus on our customer, has further strengthened the trust that is placed in our brand.
Our Food business delivered solid growth, re-enforcing its strength and resilience. Turnover and concession sales
grew by 8.4% and by 7.2% on a comparable store basis, notwithstanding the impact of increased levels of
loadshedding and the Avian flu. Underlying product inflation for the period averaged 9.1%, being below headline
food inflation as we continue to invest in price. Sales grew by 8.6% in the last six weeks of the period, delivering
positive underlying volume growth as product inflation eased to 7.9%. Space grew by 3.3% over the prior period,
while online sales increased by 46.6%, contributing 5.1% of South African sales, driven primarily by increased
penetration of our on-demand Woolies Dash offering.
Whilst our Fashion Beauty and Home business continues to make steady progress against its strategic priorities,
sales for the 26-week period were impacted by poor availability, due in part to the late arrival of certain summer
ranges arising from congestion at the ports. Turnover and concession sales grew by 2.2%, with comparable store
sales increasing by 1.5%. Sales growth in the last six weeks of the period improved to 3.8%, supported by the
successful execution of our Black Friday promotions and festive season trade. Our teams remain focused on full-
price sales, which positively impacted price movement of 11.4%. Net trading space increased by 0.3% relative to
the prior period, while online sales grew by 26.9% and contributed 5.4% of South African sales.
The Woolworths Financial Services book reflects a year-on-year increase of 4.9% to the end of December 2023,
driven by growth in new accounts and credit card advances. The annualised impairment rate for the six months
ended 31 December 2023 was 6.3%, compared to 5.5% in the prior period. While this reflects the strain that
consumers are under in the current macro-economic environment, it is reducing from the peak of the last quarter
of the previous financial year.
COUNTRY ROAD GROUP ('CRG')
Trading conditions in Australia and New Zealand have deteriorated further, with consumer sentiment in Australia
at near-record lows, and household savings the weakest since the GFC. In addition, the retail industry has been
disproportionately impacted by the shift in spending away from goods, to services. CRG sales for the current
period declined by 5.0% and by 9.5% in comparable stores, off a high prior period base in which sales grew by
25.5% following the strong recovery from the Covid-impacted lockdowns. Sales growth in the last six weeks of
the period was positive, at 1.3%.
The Country Road brand continues to deliver a market-leading performance across key categories. Trading space
increased by 6.6% during the period, supported by the ongoing expansion of our wholesale and concession
channels. The contribution from online sales increased marginally to 26.8% of total sales.
TRADING STATEMENT
Given the inclusion of the David Jones contribution in the prior period, our group results to be reported for the
first half of the 2024 financial year are not directly comparable to that of the prior period. The Earnings per share
('EPS'), headline EPS ('HEPS') and adjusted diluted HEPS ('adHEPS') for the current period are expected to be
more than 20% lower than the reported EPS, HEPS and adHEPS for the prior period, primarily as a result of the
inclusion of David Jones in the prior period base, and are expected to be within the ranges reflected in the table
below:
December 2022 December 2023 December 2023
reported expected range expected range
Total Group (cents) (%) (cents)
EPS 293.7 -25.0% to -35.0% 190.9 to 220.3
HEPS 294.5 -25.0% to -35.0% 191.4 to 220.9
adHEPS 284.7 -20.0% to -30.0% 199.3 to 227.8
Whilst the Group has maintained its stringent focus on managing inventory, and containing cost, we equally
continue to invest behind our various strategic initiatives. This, coupled with the impact of subdued discretionary
spend on the profitability of our apparel businesses (particularly in Australia), is expected to result in EPS, HEPS
and adHEPS from Continuing operations being lower than that of the prior period. This should be further
considered in the context of a high prior year base in which EPS, HEPS and adHEPS from Continuing operations
grew by 44.7%, 44.9%, and 48.3%, respectively. Group earnings are expected to be within the ranges reflected
in the table below.
December 2022 December 2023 December 2023
reported expected range expected range
Continuing operations (cents) (%) (cents)
EPS 219.2 -5.0% to -10.0% 197.3 to 208.2
HEPS 219.9 -5.0% to -10.0% 197.9 to 208.9
adHEPS 222.1 -3.0% to -8.0% 204.3 to 215.4
The trading statement above has not been reviewed or reported on by the Group's external auditors.
The Group's results for the interim period are expected to be released on or about 28 February 2024.
CONSTANT CURRENCY INFORMATION
Constant currency information has been presented to illustrate the impact of changes in the Group's major
foreign currency, the Australian dollar. In determining the constant currency growth rate, Turnover and
concession sales denominated in Australian dollars for the current period have been adjusted by application of
the aggregated monthly average Australian dollar exchange rate for the prior period. The aggregated monthly
average Australian dollar exchange rate is R12.21 for the current period and R11.60 for the prior period. Foreign
currency fluctuations of the Group's rest of Africa operations are not considered material and have therefore not
been applied in determining the constant currency growth rate.
The information contained in this announcement, including constant currency and pro forma information, is
presented in accordance with the JSE Limited Listings Requirements. The constant currency and pro forma
information is the responsibility of the Group's directors and has been prepared for illustrative purposes only
and, because of its nature, may not fairly present the Group's financial position, results of operations or cash
flows.
Contact:
ZaidManjra@woolworths.co.za (Group Finance Director)
JeanineWomersley@woolworths.co.za (Investor Relations)
InvestorRelations@woolworths.co.za
Cape Town
23 January 2024
JSE Equity and Debt Sponsor
Investec Bank Limited
Date: 23-01-2024 07:05:00
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