Woolworths shares rise despite profit hit

Woolworths has copped a 1.2 per cent hit to its profits as the coronavirus pandemic drives a wrecking ball through the supermarket giant’s hotels division.

This was despite grocery hoarding ahead of expected COVID-19 lockdown and a surge in online sales.

Woolworth’s shares were up 0.2 per cent in early trading on Thursday at $39.35. 

Profits were $1.6 billion on total sales of $63.7 billion in 2019/20, an annual increase of 8.1 per cent.

Group online sales soared 41.8 per cent to $3.5 billion as people flocked to online shopping.

Woolworths said despite strong sales across its food businesses, the closure of its hotels and costs associated with coronavirus impacted on the group’s earnings in the second half of the financial year.

Chief executive Brad Banducci said the year tested the company’s resilience and “will forever change the way we live and work”.

“We were impacted by the ongoing drought, devastating busfires, New Zealand’s White Island volcanic disaster, unrest in Hong Kong and the COVID-19 crisis,” he said on Thursday.

“Australian and New Zealand food sales increased materially during March as customers pantry-loaded ahead of expectations of lockdowns, with weekly growth reaching over 40 per cent and 50 per cent at its peak.”

Drinks sales surged as on-premises venues, including the group’s hotels business, were closed under government-mandated restrictions on March 23.

The Big W discount department stores saw a 181 per cent increase in online sales in the final three months of the year, while New Zealand Food’s online presence rose by 11.9 per cent.

The group paid a final dividend of 48 cents per share.

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