Woolworths share price dips as online sales soar 37% during Q1
Strong Q1 results couldn’t save the Woolworths (ASX: WOW) share price from bearish investors, as the company's stock dropped by a little more than 1% by the afternoon session.
Sometimes the timing just isn’t quite right.
Woolworths (ASX: WOW) today announced its first quarter FY20 results to the market, revealing that Group sales had risen 7.1%, online sales had skyrocketed 37.4% and that Australian food sales had hit A$10.7bn.
Yet the Woolworths share price still fell by some 1.64% by the afternoon session, potentially due to the fact that the company also today revealed that it had underpaid staff by A$200m to A$300m – from as far back as 2010.
Brad Banducci, the Woolworths Group CEO said in response to this news that:
‘We unreservedly apologise. The highest priority for Woolworths Group right now is to address this issue, and to ensure that it doesn’t happen again.’
Investors however, may not be listening.
Woolworths share price: first quarter results
It was a decisively strong quarter for Woolworths, compensation issues aside – as all of the company’s key metrics rose. Indeed, even when factoring in today’s dip – the Woolworths share price has still risen 27% year-to-date – quite ahead of the ASX 200 benchmark.
It was maybe the Group’s online sales that proved the most impressive – rising 37.4% to hit A$802m for the first quarter of FY20. WooliesX, specifically, saw online sales grow even faster, soaring 43.2% during Q1.
Specifically, it was noted that:
‘During the quarter, WooliesX further enhanced the connected customer and digital experience with the relaunch of its delivery subscription model.’
‘Delivery Unlimited. Mobile app engagement also increased as the experience, stability and speed of the app continues to improve.’
Besides standout online growth, overall Group sales growth also proved strong – climbing 7.1% to reach A$15.9bn.
As to be expected, the majority of this revenue came from Woolworths Australian Food sales, which hit an impressive A$10.7bn during Q1. With it further being revealed that:
'Comparable sales increased by 6.6% with comparable item growth of 4.7% driven by transaction growth and items per basket.'
Commenting on these standout figures, Woolworths CEO noted that:
'It has been a pleasing start to F20 with strong sales momentum across the Group. In Australian Food, sales growth was driven by the success of Lion King Ooshies, Discovery garden and the continued growth in Online.'
While a strong start, Mr Banducci cautioned, 'we expect sales growth to moderate over the remainder of the financial year.' Such comments seem to line-up with Mr Banducci’s conservative approach when it comes to providing forward-facing guidance.
BIG W – a key part of Woolworths retail presence – also saw modest sales growth for the quarter, as revenue edged up 2.6% on a QoQ basis to A$926m – up from A$902m in Q1 FY19.
At 13:48 AEST the Woolworths (ASX: WOW) share price was down over a full percent (-1.17%) to A$37.26.
Watch this space.
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