Woolworths Holdings warns of earnings drop amid restructuring challenges

WOOLWORTHS Holdings has warned that its adjusted headline earnings per share (aHEPS) will fall between 17% and 22% for the year to June 29 after a restructuring impacted its Australian business, and despite continued revenue growth in South Africa.

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The grocery and fashion, health and beauty retailer warned in a trading statement Thursday that aHEPS will likely be between 292.8 cents to 311.6 cents, compared with 375.4 cents at the same time last year. As of this month, more than 24 000 Woolworths employees have access to health insurance, the first group in the retail sector to offer benefits of this scale.

Turnover for the group increased by 6.4% and concessional sales by 7.3% in the 52 weeks to June 29, despite the tough macroeconomic conditions and significant uncertainty arising from global trade relations.

Woolworths financial director Zaid Manjra said in the trading statement that in South Africa, consumer sentiment and discretionary spend remains subdued despite moderating inflation and interest rate cuts. However, Woolworths South Africa delivered strong turnover and concession sales growth of 9.4%.