The Woolworths Group Ltd (ASX: WOW) share price is sinking on Tuesday despite the company's sales having soared 8% in the three months ended 2 April.
Right now, shares in the supermarket operator are down 0.64%, trading at $38.65
Woolworths share price lower as quarterly sales surpass $16b
Here are the key takeaways from the S&P/ASX 200 Index (ASX: XJO) giant's quarterly report:
- Group sales soared 8% on the prior comparable period (pcp) to $16.3 billion
- Sales in its Australian food leg lifted 7.6% to $12.3 billion
- Its Australian business-to-business segment saw sales leap 16.4% to around $1.2 billion
- Big W's sales rose 5.7% to $1 billion
- Over at New Zealand Food, sales increased 7% to approximately $1.9 billion
- Finally, the group saw its eCommerce sales increase 5.1% to $1.5 billion
Looking to the company's major businesses, sales at its Australian supermarkets lifted 6.9% last quarter while those of its Metro Food Stores grew 27.9%.
Meanwhile, the newly-acquired MyDeal helped drive sales in the company's 'other' category 37.7% higher to $66 million.
What else happened last quarter?
Woolworths noted its supply chain began to recover last quarter while inflation appeared to moderate slightly in its food businesses.
Average prices at its Australian Food business increased by 5.8% last quarter compared to the pcp.
Meanwhile, those at New Zealand Food rose 9.5%. Many of the company's Countdown and SuperValue stores were hit with flooding last quarter while Cyclone Gabrielle brought supply challenges and vegetable quality issues.
What did management say?
Woolworths CEO Brad Banducci commented on the news seemingly weighing on the company's share price today, saying:
Our current focus is on continuing to improve our customer experience, especially value for money and product availability, and we remain cautiously optimistic that Woolworths Group is well placed to navigate and respond to the current trading challenges successfully for all key stakeholders – our customers, our team, our suppliers and community partners, and our shareholders.
What's next?
While Woolworths didn't provide any new guidance today, Banducci said sales trends have remained in line with the third quarter in recent weeks. He also noted sales growth has remained solid in its food businesses but moderated in Big W, continuing:
In general, customer spending is stable. However, value-conscious customers are becoming more thoughtful about their discretionary spend, trading into more affordable options such as our own brands and looking for additional ways to save in store or through our digital, rewards, and eCommerce platforms.
Looking ahead, we're seeing signs of overall inflation moderate in food. However, in many areas inflation remains frustratingly elevated and we need to continue to work hard to provide our customers with great value across their shopping basket.
Woolworths share price snapshot
The Woolworths share price has been outperforming the ASX 200 as of late.
The stock has gained 18% since the start of 2023. It's also currently 2% higher than it was this time last year.
For comparison, the ASX 200 has gained 6% year to date and is flat over the last 12 months.
