Woolies records a loss of R3.5bn

The R6.9bn impairment of Australian department store chain David Jones knocked Woolworths into a loss of R3.5bn for its 2018 financial year, from a profit of R5.4bn in the prior year, it reported on Thursday.

Headline earnings per share (HEPS) declined 17.7% to 346.3c.

Woolworths cut its final dividend by

27.5% to 130.5c, taking its total for its 2018 financial year to R2.39, a 23.6% decline from the previous year’s R3.13.

The retail group’s overall turnover grew

1.6% to R75bn.

Of the five divisions Woolworths segments itself into, food was its star performer, growing both sales and profit by more than 8%.

The food division contributed 43% of the group’s sales, but only 27% of gross profit.

What Woolworths calls its “fashion, beauty and home” division suffered a 1.5% decline in sales and 4% decline in gross profit.

“Our womenswear modern range failed to resonate with our core customer,” Woolworths chief executive Ian Moir said. “In Woolworths fashion, beauty and home, we have made a number of changes to structure, process and product offering to effect improvement in our womenswear ranges.”

The SA clothes division contributed 20% of the group’s sales, placing it behind David Jones, which contributed 21%.

The clothes division contributed 24% of the group’s profit, placing it behind Australian clothing chain Country Road, which contributed 25% of the group’s gross profit despite only contributing 16% of sales.

“Country Road had a mixed year. Strong performances from Witchery, Mimco and Politix were offset by a weaker Country Road womenswear performance, resulting in comparable store sales declining by 1.8%,” Moir said.

David Jones’s sales declined 3.8% to

R14.5bn and its gross profit by 4.6% to

R6.2bn.