Woolworths (ASX: WOW) has announced excellent sales growth in its September 2019 quarter update, is it time to buy shares?
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 Countdown 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 September 2019 Quarter Sales
The supermarket company reported that total first quarter sales from continuing operations (which excludes ‘Petrol’) grew by 7.1% to $15.9 billion. Australian Food sales grew by 7.8% to $10.66 billion, driven by 6.6% comparable Food growth. But don’t forget, sales growth might be different to profit growth.
Management attributed the result to the success of Lion King Ooshies, Discovery Garden and the continued growth of Online, which saw online sales growth of 43.2%. Online sales represented 4.5% of Australian Food sales. Woolworths announced it has relaunched its delivery subscription service for unlimited delivery.
To improve the convenience offering to customers, 49 stores now offer express delivery and 56 offer same day delivery.
Average prices increased 0.3% despite fruit and vegetable prices returning to deflation, although excluding tobacco prices dropped 1.2%.
Other divisions also saw solid growth, New Zealand Food sales grew by 8% to $1.66 billion, Endeavour Drinks sales grew by 4.9% to $2.19 billion, Big W sales grew by 2.6% to $926 million and Hotels sales grew by 5.5% to $468 million.
Woolworths CEO Brad Banducci said: “We are pleased with trading in the year to date and preparations for the Christmas period are well progressed.
We remain focused on providing the best possible customer experience across all of our businesses as we manage a material change agenda in the first half including the implementation of our new Customer Operating Model in Woolworths Supermarkets, the rollout of Fresh Made Easy and the ramp-up of the MSRDC.
“The Endeavour Group transaction is progressing well with the next key milestone a shareholder vote on the Restructure Scheme on 16 December.”
Is The Woolworths Share Price A Buy?
I was really impressed by the sales growth that Woolworths achieved in this quarter. At best, I was expecting growth to be half today’s announced rate – just look at what Coles (ASX: COL) reported in its own quarter yesterday.
It’s also not good to hear that Woolworths underpaid staff up to $300 million, which now has to be repaid.
Woolworths certainly isn’t cheap, and I’m not sure the next three quarters will be as good as this one. But it seems to be winning against Coles right now. For reliable returns at good value I would rather invest in the shares revealed free report below.
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