Woolworths Posts Weaker Second Half as Womens Fashion Weighs
(Bloomberg) -- Woolworths Holdings Ltd. posted a weaker second half as South African customers didn’t take to its latest choice of women’s fashion and selling conditions remained tough in its home market and in Australia.
The specialist in organic food and designer clothing for wealthier customers also said charges related to its struggling Australian business will result in a full-year loss, its first since at least 2002.
“I’ve been concerned about the South African fashion choices for some time,” Alec Abraham, an analyst at Sasfin Securities Ltd., said by phone. “The Australian business is still in transition, but the changes there are taking longer than anticipated.”
The company will probably report a per-share loss of 3.40 rand to 3.97 rand for the 52 weeks ended June 24, the Cape Town-based company said in a statement Thursday. That will be the first annual loss since Bloomberg records on Woolworths began in 2002. Headline earnings per share, which exclude one-time items, fell as much as 20 percent.
The shares rose with other South African retailers in Johannesburg, paring its decline this year to 18 percent. The stock earlier fell as much as 3.6 percent.
In Australia, where the company bought the department-store chain David Jones for $2 billion in 2014, a revaluation resulted in a noncash impairment charge of 712.5 million Australian dollars ($527 million) in the first half, while the unit’s head was fired earlier this year.
Full-year sales gained 1.6 percent, while revenue for the first half was 2.9 percent.
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