Woolsworths Optimistic About Profits Increase

One of the largest retail company has adjusted its full-year profits increase to 5% or 6%.

Woolsworth, which had earlier estimated that its profit will go up between 4% to 6%, has made the figure adjustments last Thursday. This despite its other business, the hardware store Masters, losing out and already experiencing a $157 million loss early this year.

Masters loss forecast at the start of the financial year was pegged at $119 million for the full year, including interest and taxes.

According to one Woolworths executive, however, “Actual losses were more than anticipated mainly due to overly-optimistic sales budgets, relatively higher wage costs for new store openings and lower gross margins due to the sales mix.”

But despite this, the company is optimistic that Masters will be able to break even by the 2016 fiscal year, as sales will be stabilised and store growth is expected.

Woolsworths says its earnings forecast can be attributed to “higher levels of competition in a subdued trade and building sector”.

Meanwhile, Danks, its distributor of hardware and garden supplies, has also posted an $18 Million profit for the year up to June, and already discounting taxes and interest. Danks, however, had a forecast of $38 Million, which means it has fallen short of its goals by half.

Shares for Woolsworths fell by 77 cents, or about 2.29%, when trading closed today, even as the market was on the up and up overall.