Woolworths Holdings reported a 58.3% jump in first-half profit, its first in five years, as sales recovered from the lows at the start of the Covid-19 pandemic. The apparel sector, worst-hit among retail sectors in South Africa and Australia at the start of the pandemic, recovered slightly from May as lockdowns lifted and retailers gave discounts to attract shoppers. But lower store footfall, particularly in large shopping centres and airport locations, significant drop in demand for formal wear and a return of restrictions in Australia has put clothing sales back on shaky ground. Woolworths, which sells clothes, food and homeware across 14 countries in Africa, Australia and New Zealand, said headline earnings per share (HEPS) – the main gauge of profit in South Africa – surged to 261.1 cents in the 26 weeks to 27 Dec from 164.9 cents a year earlier. Adjusted diluted HEPS, which strips out certain items, rose by 19.4%.
Woolworths booked a 5.3% increase in group turnover and concession sales in the first half, a recovery from the 4% decline in the second half of its financial year to 28 June. Food sales rose 10.9% in South Africa, where Woolworths has now seen market share growth in that segment for 10 consecutive years. Woolworths’ fashion, beauty and homeware business in South Africa, where the group makes 62% of its revenues, saw sales drop 11.2% in the 26 weeks to December 27, hit by a significant decrease in Black Friday spending and the reduction in formal wear trade. The company announced in September a strategic review of its fashion business in South Africa. Woolworths will expand its casual and sports leisure wear ranges and reduce its reliance on formal wear. The group is also ending its Studio.W and WCollection clothing ranges; it will also add selective third-party brands to its stable of private label brands.