Woolworths Limited (ASX: WOW) has released a sound set of half-year results including a small upward revision to guidance. The market was perhaps hoping for more however, as in early trade the share price was down around 2%.
Here are 10 key takeaways from the results announcement:
1) Sales (before significant items) grew 6% on the prior corresponding period (pcp) to $31.8 billion
2) Net profit after tax (NPAT) was also up 6% on the pcp to $1.3 billion
3) Earnings per share (EPS) increased 4.9% to 106.1 cps
4) A fully franked interim dividend of 65 cps declared (up from 62 cps in the pcp)
5) Australian Food and Liquor continued its solid performance with growth in earnings before interest and tax (EBIT) of 6.8%
6) The comparable store sales numbers for the Food and Liquor division were also a healthy 3%
7) Earnings from the Hotels division were impressive with a 16.4% increase
8) The jury remains out on the Home Improvement division with Masters' loss widening by 4.1% and Home Timber and Hardware earnings falling by 29.2% despite a 7.8% rise in sales
9) General Merchandise division which includes Big W reported an EBIT decline of 6.9%
10) Guidance has been revised up from a previous range of 4% to 7% growth in NPAT to between 5% to 7%
Foolish takeaway
Woolworths has again shown that not only can it defend its supermarket position against a resurgent Coles, owned by Wesfarmers Ltd (ASX: WES), but that it is also taking the fight right up to the Wesfarmers owned Bunnings through the roll-out so far of 38 Masters Home Improvement stores.
While the diversified conglomerate structure and management team at Wesfarmers certainly does have its appeal; for many risk-averse investors, the simplified retail-focused Woolworths' business model is hard to beat.