South African retailer Woolworths Holdings has forecast its annual earnings could increase by up to 30% on the back of higher sales and gains from foreign exchange.
Woolworths said its headline earnings per share - a key financial metric in South Africa - for the year to 24 June were expected to be 20-30% higher.
The forecast came in a sales update reported today (17 July). Woolworths said its comparable-store sales increased 7.1% over the year. Group sales were up 11.8%.
Comparable food sales rose 7.8%, with food revenues increasing 11.9%.
Woolworths Holdings Limited (Incorporated in the Republic of South Africa) Group sales for the year increased by 11.8% over the comparable period in 2011. Sales in comparable stores grew by 7.1%. Clothing sales in South Africa grew by 12.6% with a price movement of 6.5%. Sales in comparable stores grew by 5.9%. Food sales grew by 11.9% with price movement of 6.4%. Sales in comparable stores grew by 7.8%. General merchandise grew by 7.0% and by 4.7% in comparable stores.
Woolworths retail space, including Africa, grew by 3.6% year-on-year, net of closures and excluding franchise conversions. Fifty nine local franchise stores have now been converted to corporate and 16 will remain franchised. Converted franchise stores are treated as non-comparable. Sales in Australia and New Zealand contracted 2.6% in Australian dollar terms, with sales in comparable stores declining by 6.6%. Net space in Australia grew by 1.3%. Country Road's South African sales are included in the South African clothing segment. The Woolworths Financial Services debtors´ book reflected year on year growth of 8.3% with the impairment rate for the year at 1.9% compared with 1.4% for the equivalent period last year.
TRADING STATEMENT We expect that both earnings per share ("EPS") and headline earnings per share ("HEPS") for the 52 week period to 24 June 2012 will be between 20% and 30% higher than the corresponding reporting period last year. Included in both EPS and HEPS is R45m representing unrealised post tax foreign exchange gains that will unwind in subsequent reporting periods. Shareholders are advised that the financial information contained in this announcement has not been audited and reported on by the Group's external auditors. The Group's year end results for the 52 week period to 24 June 2012 are scheduled to be announced on SENS on or about 23 August 2012.
