Consumer stocks, while being comparatively stable always reveal some growing companies to invest in. These two stocks from ASX listed companies, are not only dividend paying, promise growth potential too.
Woolworths Group Ltd (ASX: WOW)
Woolworths Group Ltd (ASX: WOW), on 26 February 2025 announced result for the first half of fiscal 2025. The Group sales raised by 3.7%, even though EBIT declined by 14.2%, due to a drop in Australian Food EBIT, which decreased by 12.8%. This decline was caused by industrial action disrupting stock flow, as well as ongoing inflationary pressures and increased promotional investments. The company completed progress in adjacent businesses like Cartology, Rewards, and Services, with strong growth from these areas. eCommerce also showed impressive growth at 20%, with services like Same Day delivery and MILKRUN contributing to this expansion.
The company’s investment in price and promotions to deliver more value to customers showed positive results, mainly in Australian Food, where sales grew by 2.7%, though this was partially offset by the supply chain disruptions from industrial action. New Zealand Food posted a stronger performance, with EBIT increasing by 15.2%. BIG W, however, struggled, with a 45.9% drop in EBIT, due to competitive pressures in the discount retail space and lower average selling prices, despite solid item growth. The Group’s media and services business performed well, with Cartology’s revenue rising by 15.3% and Everyday Rewards and Mobile customers growing by 12%.
WOW is focusing on improving retail fundamentals, simplifying operations to deliver efficiencies, and continuing to optimize its supply chain and portfolio. Current trading in the second half of fiscal 2025 is showing positive signs, with Australian Food sales growing by 3.3% and New Zealand Food seeing a 4% increase in sales. The company is optimistic about maintaining momentum in eCommerce and other strategic areas, including expanding its MarketPlus offering and continuing to develop its rewards programs.
Collins Foods Ltd (ASX: CKF)
Collins Foods Ltd (ASX: CKF) is focused on achieving operational excellence, driving same-store sales growth, and improving margins by leveraging its restaurant network. The company core policy revolves around continuous profitable restaurant development in Australia and a disciplined approach to capital allocation, including potential mergers and acquisitions opportunities. Collins Foods goals to generate value for shareholders by maintaining a sharp focus on cost management and operational execution, mainly in its highly profitable Australian market.
Collins Foods, among the best growth stocks to buy now, is accelerating its expansion efforts in Europe, particularly in Germany, which is expected to become a second strategic growth pillar. A binding agreement with Yum! The company plans to open 40 to 70 new KFC restaurants in Germany over the next five years to support growth. The German market, with its large consumer base and under-penetrated KFC brand, offers significant growth potential. In the Netherlands, the company is focusing on operational realignment to enhance performance and profitability by reviewing and optimizing its restaurant portfolio, though a non-cash impairment of up to $32.7 million is expected in FY25.
In the first half of FY25, KFC Australia saw a slight increase in sales, whereas Europe faced softer performance due to the broader QSR sector slowdown. The company expects to add new restaurants to its portfolio in FY25, by a continued focus on driving profitable growth. Although commodity costs have improved in Australia, labour and energy costs remain high, and the company anticipates a slight decrease in EBITDA and EBIT margins for the full year, alongside a higher interest expense due to lease additions.
(Source: Company Announcements)
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