Woolworths Group Ltd (ASX: WOW) has released its third quarter sales update to investors.
Woolworths was founded in 1924 by Percy Christmas, its first store was opened in Sydney’s Imperial Arcade. Woolworths is Australia’s largest supermarket business, it operates Woolworths supermarkets in Australia and Coundown in New Zealand. It also runs the retail department store Big W. With over 3,000 stores and more than 200,000 employees it’s one of Australia’s largest employers.
Woolworths Third Quarter FY19 Sales
Woolworths announced that its total third quarter sales from continuing operations grew by 4.2% to $14.9 billion, or 5.1% when adjusted for Easter.
The all-important Australian Food segment increased sales by 4.1% to $10 billion with comparable growth of 3.6%. The average change in prices excluding tobacco dropped 1.4%, but comparable transaction growth was 1.9% and comparable items per basket grew 2.6%.
Endeavour Drinks, which includes Dan Murphy’s and BWS, experienced sales growth of 3.7% to $2.07 billion. This was boosted by comparable sales growth of 3%.
New Zealand Food saw sales growth of 3.2% to NZ$1.69 billion with 4.1% comparable sales growth.
The troubled retailer Big W managed to grew sales by 2.6% to $791 million thanks to comparable growth of 4.4%. It is currently going through the process of closing some Big W stores.
Finally, the Hotels segment managed to grow revenue by 3.2% to $402 million, with comparable growth also of 3.2%.
The Woolworths Group’s online sales growth was 35.1%, although some analysts question whether this is actually a good development because of the additional costs involved such as picking the items, shipping and so on.
The discontinued operations of the ‘Petrol’, which is being sold to EG Group, had revenue of $1.1 billion.
Woolworths CEO Brad Banducci said: “We are pleased in sales momentum across the Group in Q3…We are progressing our key strategic priorities with our focus now moving to plans for FY20 to deliver for our customers, team members and shareholders.”
Is Woolworths A Buy?
I was surprised at how solid all of the different segments performed simultaneously for Woolworths, particularly Big W. It might be a decent option for a defensive dividend stream.
However, there are many ASX businesses that are creating stronger revenue growth than 4%, which I think are better ideas to focus on for the longer term. The big ASX businesses in the free report below are better ideas for the long run in my opinion.
3 Solid ASX Shares For Income And Growth
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