Woolworths Group Limited (ASX: WOW)
Moderating inflation in Food businesses and weak consumer sentiment impacting discretionary spending reflect a challenging operating environment. Woolworths Group Limited, one of the good Fundamental Stocks, announcing its results for financial year FY24 ended 30 June 2024, indicated that after a strong first half, it was striving hard in H2 to address fast changing customer expectations.
Throughout the year, Woolworths consolidated its three marketplaces into a unified Group platform known as Woolworths MarketPlus (WMP), which encompasses Everyday Market, MyDeal, and BIG W Market. The launch of BIG W Market in November 2023 has seen a robust performance, achieving $44 million in Gross Merchandise Value (GMV) for the financial year and contributing to a 12.1% growth in Woolworths MarketPlus GMV for FY24.
The Group's normalized eCommerce sales experienced an 18.5% increase, primarily driven by Australian Food, with same-day and on-demand services gaining traction. Approximately 86% of orders are now executed within 24 hours of placement, and 46% are completed on the same day. To address the rising demand for same-day collection, a new sub-60-minute service called Direct to Boot Now was introduced across 307 locations. Digital traffic has also risen, with average weekly visits to the Group’s digital platforms growing by 19.7%, and digital interactions now surpassing in-store transactions.
Woolworths reported total group sales of $67.9 billion for the year, reflecting a 5.6% increase compared to the previous corresponding period. The group’s Net Profit After Tax (NPAT) saw a slight decline of 0.6%, decreasing from $1.72 billion in FY23 to $1.71 billion in FY24.
The group’s full-year dividend per share experienced a significant rise of 38.5%, increasing from 104 cents in FY23 to 144 cents in FY24.
Woolworths is good for Long Term Holding, as it is actively advancing its Supply Chain Transformation strategy in New South Wales, with several key projects approaching completion. The company has achieved practical completion of the Moorebank NDC, which is anticipated to commence operations in the first half of fiscal year 2025. Additionally, the Auburn CFC is also nearing its completion, with an expected opening in the latter half of fiscal year 2025. These initiatives are projected not only to facilitate substantial growth but also to enhance operational efficiencies in alignment with the company's strategic objectives.
Woolworths is one of the Best ASX Shares holding a leading position within the Australian retail sector, which contributes to a considerable degree of stability in its operations. This stability is reflected in the company's consistent financial performance and earnings, as well as a recent notable increase in dividends, significantly enhancing the income-generating prospects for its shareholders. Furthermore, the company's financial results indicate potential for further substantial improvements, bolstered by its extensive digital expansion initiatives and robust online sales while Woolworths is simultaneously prioritizing enhancements to its supply chain, with plans to establish key distribution and customer fulfilment centers in the near future, aimed at optimizing operations and reducing costs.
Technically, the stock is moving above its EMAs (Exponential moving average) on the daily timeframe with 50 EMA overtaking 200 EMA, indicating growing short term momentum. The fall this day merely the retracement of result day rise, with all long term supports intact.
Source: Company’s Report
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