- First-half profits expected to be up to 35% lower
- Retailer says it is a consequence of “increased investments”
- First-quarter sales slip 2.5% to A$15.75bn (£7.3bn)
Australian grocer Woolworths has issued its third profit warning of the year as its feels the pressures from rivals Coles and Aldi.
The retailer said that earnings in the six months to the end of December will be between A$900m (£418m) and A$1bn (£465m), which is 28% to 35% lower than the same period the prior year.
It came as the retailer reported that total sales in its first quarter slipped 2.5% to A$15.75bn (£7.3bn). Excluding petrol sales edged up 0.8%.
Woolworths said today it is investing in “price, service and loyalty” to stem its falling sales, as part of a three-year turnaround strategy.
Chief executive Grant O’Brien is due to step down next month. His departure was revealed earlier this year at the same time the group said it planned to cut up to 1,200 jobs. Chairman Ralph Waters also exited the business in August.
Despite today’s results O’Brien said: “I am pleased with the positive steps we are taking to transform our business, particularly as we accelerate the pace of our change program across all of our businesses.”
Chairman Gordon Cairns added: “The board and management are focused on making the best long-term decisions across all our businesses.
“There will be short-term consequences, but we are confident that the decisions we are taking are necessary to realise the immense potential of the group for our shareholders.”
Shares in Woolworths fell around 9% on news of the profit warning.