Investors pleased after Woolworths Group Ltd trumps Coles

Shares in retail conglomerate Woolworths Group Ltd (ASX: WOW) were up 2.3% to $27.53 at the time of writing on the first trading day after the release of its half-year results on February 23.

Woolworths reported a profit surge of 38% to $969 million, with underlying earnings up almost 15% to $902 million and a 3.8% increase in sales.

The results delivered the expected outcome, with Woolworths outperforming Wesfarmers Ltd’s (ASX: WES) Coles yet again in cementing its position as the frontrunner in the supermarket giant space, with Wesfarmers announcing on February 21 Coles had suffered a 14.1% profit slump to $790 million.

Wesfarmers shares were down 2.8% to $41.33 at the time of writing, sliding down from $42.53 to close off last week’s trade.

Big W is not expected to make a great recovery to buoy Woolworths results in the second half, but a surge in Australian food sales will likely hold the supermarket giant in good stead to book solid FY18 results.

Woolworths shares have risen steadily since the price tanked to $24.54 in October 2017 and USB slapped a buy rating on the stock in mid-February when it sank to $26.74, but as the price climbs back towards $30 many buyers may hold their fire.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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