The Woolworths Group Ltd (ASX: WOW) share price is climbing today as investors react to the company’s full-year results.
Here’s my quick take on the Woolworths FY20 report.
Pandemic tailwind to flow into FY21
Woolworths delivered a weaker than expected result, despite a 6% increase in revenue to $63.6 billion for the financial year.
Net profit fell to $1.166 billion, with the biggest hit coming from the mothballed Hotels division. Sales revenue improved across the board with Australian and New Zealand Food up 8.3% and 10.5% respectively, behind a sustained increase in people cooking at home once again.
Anecdotally, Woolworths seems to be my only recurring expense during the economic shutdowns.
BIG W’s turnaround continued, growing revenue by 10.5% as consumers flocked to the low-cost warehouses, whilst Endeavour Drinks, which includes Dan Murphy’s, added 9.9%. “Dan Murphy’s operating hours” was among the most popular Google searches during the year.
The Hotels division which was in the process of being demerged, now on hold, saw sales fall 19.5%. Most impacts were felt after February but are now creeping into September in Victoria.
Analysts were expecting a $1.34 billion profit and dividend of $0.49 cents per share; management declared a slightly lower result, at 48 cents per share.
The major highlight was the huge growth in online sales, up 41.8% in volume to $3.5 billion or just 5.5% of total sales; the seamless experience for Victorians is likely to see this grow in popularity.
The company is also awaiting approval of its $500 million acquisition of PFD Food Services, a distributor and wholesaler of fresh produce.
Summary: Weaker than expected, but defensiveness on show in the dividend.
For a detailed write-up on Woolworths’ results, check out this article from Rask Media’s Jaz Harrison: FY20 report: Woolworths (ASX:WOW) share price rises