Woolworths profit slumps on soft clothing sales growth

Source: Reuters/Lelethu Madikane

"The impact of softer-than-expected topline growth in our apparel businesses, coupled with pressure on gross profit margins and increased operating expenditure attributable to our transformation initiatives, negatively impacted profitability," the retailer said in a statement.

As a result, the company, which also owns food stores in South Africa, said its headline earnings per share fell to 152.8 South African cents in the 26 weeks ended December 29, 20024.

Group adjusted earnings before interest and tax declined by 13.7% to R2.8bn.

Group turnover and concession sales rose by 5.7% to R40.3bn, and in constant currency by 6.2%, buoyed by the food business, which the retailer said delivered sales growth of 11.4% and 7.3% on a comparable-store basis.

Fashion, beauty and home sales in South Africa rose by 2.5%, while in Australia and New Zealand, where the company owns the Country Road fashion chain, sales declined by 6.2%.

Woolworths Holdings declared an interim dividend of 107 cents per share, down 27.7% from the prior year.