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“Cost growth in second-half will also benefit from the non-recurrence of COVID costs … however, cost inflation in areas like wages, energy and supply chain remains material and well above recent history,” Woolworths said.
Coles on Tuesday reported a better-than-expected first-half profit on reduced pandemic-related spending but warned about rising costs.
Woolworths expects solid sales momentum continuing in the second-half till date, but estimates operating earnings growth to be lower sequentially.
For the six months ending Jan. 1, Woolworths benefited from a 2.5% sales growth at its top earning unit Australian Food as consumers returned to shopping in store, with a further boost from non-recurrence of direct COVID costs of A$239 million incurred last year.
The grocer’s profit attributable to continuing operations, excluding one-off costs, in the first half was A$845 million ($578.99 million), compared with A$676 million a year earlier. That compares with a Macquarie estimate of A$842 million.
Demand for groceries and essential items remained robust as rising prices and subsequent cost-of-living pressures forced shoppers to pull back on discretionary spending.
The Sydney-based grocer declared an interim dividend of 46 Australian cents per share, compared with 39 Australian cents per share a year earlier.
($1 = 1.4594 Australian dollars)
