Woolworths share price rises on interim results

Woolworths share price in focus

Despite the pandemic putting a hole in economic growth, companies such as Woolworths Group (WOW) have prospered in the last 12-15 months. This was well reflected in the supermarket giant’s interim results, with the conglomerate reporting impressive growth across the board

'I am incredibly proud of the achievements of our team during the half, which went well beyond our financial results. We supported customers, whether they wanted to shop in store or online, and were able to do this in a safe and convenient way,’ Brad Banducci, Woolworths CEO, said of the interim results.

Despite a robust set of interim results, investors have been lukewarm on the stock in the last year, with WOW down around 5% in that period. The stock did however pop on today’s interim results release, with investors bidding Woolworths some 1.42% higher, to $39.64 per share, towards the end of Wednesday's session.

WOW finished out the session at $39.50 per share.

Share price gyrations aside, let’s unpack the company’s interim results.

Interim results at a glance

On the top-line, Woolworths delivered group sales of $35,845 million, representing a 10.6% increase on the prior corresponding period.

While strong growth overall, it was Woolworth’s e-commerce performance that looks to be the standout. Here management said e-commerce sales grew 77.9% across the half, coming in at $2,973 million. E-commerce now makes up 8.2% of WOW’s overall sales.

'Average weekly traffic to Group digital assets also increased materially, up 62.4% to 20.2 million visits per week as customers increasingly look to engage digitally as part of their shopping journey,’ the company flagged.

On a more granular level, Endeavour Drinks saw strong sales and earnings growth in the half, reporting sales growth of 19.0% and earnings (EBIT) growth of 24.1% – to $419 million. This performance was ahead of Ord Minnett analyst expectations, with the broker highlighting margin expansion – both earnings (EBIT) and gross margin expansion – as two key positives from Wednesday’s result.

Elsewhere, as with sales, the Group recorded robust double-digit earnings growth. Here, Group earnings (EBIT) rose 10.5% to $2,092 million, while Group profits (NPAT) gained 15.9%, to come in at $1,135 million.

Finally, for income focused investors, WOW said it would pay an interim dividend of 53 cents per share. Despite being 15% higher than the company's last interim dividend, it was below Ord Minnett’s expectations, who had modelled for a 59 cent per share H1 dividend.

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