Australia’s 10th biggest company, Woolworths (ASX:WOW) reported stronger than expected half year financial results.
Australia’s biggest supermarket chain reported its net profit after tax jumped 28% to $1.14 billion, in line with what the market was expecting.
Aussie food sales rose 11% to $23b, with more people opting to eat their own cooking. And due to the pandemic, online sales grew 78% to $2.9b, while Big W sales jumped 20%. On the flip side, due to lockdowns, especially in Victoria hotels business sales tumbled 28% .
Earnings (EBIT) grew 19% to $2.1b, beating UBS expectations.
This overall earnings surge enabled Woolworths to declare its strongest half-year dividend in six years, a 53c dividend, that’s 15% higher than the same time last year.
As for Woolworths’ outlook for the second-half of the year, group sales are expected to fall from the COVID-19 hype from March to June 2021.
The fresh food people also want to open 10-20 new Woolworths supermarkets over the next 3-5 years in Australia. And spin off their Endeavour Group drinks business in June.
WOW shares rose 0.6% to $39.32 after the result and are in breakout from a technical perspective.
WOW is a UBS, Citi, Morgan Stanley and Macquarie Buy, while it’s a Hold for Credit Suisse.