Woolworths reported a 17.7% drop in half-year earnings on Thursday, dragged down by disappointing womenswear and Black Friday sales. The decline in profit was compounded by an accounting change. Group turnover and concession sales rose 3.8% to R40.9bn (US$2.72bn), while adjusted profit before tax dropped 12.3% to R2.4bn. After a strong first quarter in the South African fashion business, the second quarter was more challenging, with improvements in kidswear, menswear and lingerie, offset by a number of product issues in womenswear and a disappointing Black Friday sales period.
Woolworths tends to be more shielded from a tough economic environment at home than its peers because it targets higher-income customers. Sales and comparable store sales in Woolworths fashion, beauty and home grew by 2.2% and by 0.9%, respectively. Food sales held up in South Africa, with a growth of 8.1%, while upmarket department chain David Jones in Australia saw sales rise 4.9%, however, the figure was 0.5% lower when adjusted for the trading week changes.