Woolworths has revealed its third quarter results, detailing continued sales growth across the group, including an Easter-adjusted sales increase of 6.4 per cent for Endeavour Drinks Group (EDG), with comparable sales increasing by 5.9 per cent.
Despite the improved third quarter performance for EDG, Woolworths CEO Brad Banducci, that the company still expects the overall EBIT for EDG in FY19 will be lower than FY18.
“After slower sales growth in H19, Endeavour Drinks’ sales momentum improved in Q3 with Easter-adjusted comparable growth of 5.9 per cent. At H19 we noted that the unsettled weather had negatively impacted sales across all of our businesses which was most pronounced in Endeavour Drinks.
“More settled weather across key trading states and the timing of New Year’s Eve supported sales in Q3. We still expect Endeavour Drinks’ EBIT for F19 to be below the prior year as we invest in improving our range, service and convenience for our customers.”
In the second quarter Woolworths had said that New Year’s Eve falling into a different quarter and unsettled weather had impacted sales, but Banducci said that things had improved for the group in the third quarter, with online sales a particularly notable area of growth.
“Online sales remained strong with growth of 10.5 per cent,” Banducci said. “For BWS, delivery sales continue to grow strongly with 559 BWS stores offering On Demand delivery with an average delivery time of just under an hour.
“Dan Murphy’s On Demand sales also continue to perform strongly following the rollout across 79 stores by the end of Q3’19.”
Banducci added that despite the sales growth, there were still some areas of concern for EDG.
“Despite the strong sales growth, category mix remains a challenge, particularly for Dan Murphy’s,” he said.
“The overall Wine category in Australia contracted marginally in the quarter with Beer and Spirits category growth of approximately two per cent and four per cent respectively.
“Beer sales were boosted by the introduction of the Container Deposit Scheme in Queensland in November.”
The group said that the quarter also saw seven BWS stores open and one close, taking the total fleet size to 1338, while no new Dan Murphy’s were opened during the quarter with 227 stores at the end of the period.