2024-05-02 19:31:05 ET
Woolworths Group Limited (WOLWF)
Q3 2024 Results Conference Call
May 01, 2024 8:30 PM ET
Company Participants
Brad Banducci - Managing Director and CEO
Conference Call Participants
Tom Kierath - Barrenjoey
Michael Simotas - Jefferies
David Errington - Bank of America
Shaun Cousins - UBS
Ben Gilbert - Jordan
Lisa Deng - Goldman Sachs
Bryan Raymond - JPMorgan
Craig Woolford - MST Marquee
Phil Kimber - E&P Capital
Richard Barwick - CLSA
Ross Curran - Macquarie
Presentation
Operator
Thank you for standing by, and welcome to the Woolworths Group F '24 Q3 Sales Announcement. [Operator Instructions] There will be a presentation followed by a question-and-answer session. [Operator Instructions]
I would now like to hand the conference over to Mr. Brad Banducci, Managing Director and CEO of Woolworths Group. Please go ahead.
Brad Banducci
Good morning, everyone. Before we start the call today, I would like to acknowledge the Traditional Custodians of the land on which we meet, the Gadigal People of the Eora Nation. And I'd like to pay my respects to Elders, past the present. Thank you for joining us today for Woolworths Group's third quarter sales results for the F '24 financial year. Joining me this morning are Stephen Harrison, our CFO; Natalie Davis, Managing Director of Woolworths Supermarkets; Guy Brent, Managing Director of Woolworths Food Company; online from New Zealand, Spencer Sonn, Managing Director of Woolworths New Zealand; Dan Hake, Managing Director of BIG W; Annette Karantoni, Managing Director of Primary Connect; and also joining us are Amanda Bardwell and Sally Copland. Sally stepped into the role of Interim Managing Director of WooliesX in early April to allow Amanda to spend more time with our customers, partners and teams across the group as part of her transition plan before assuming the CEO role in September. Moving to our results.
Q3 was a challenging quarter. We have seen a noticeable shift in sentimental behaviors as customers adjust their budgets and spending following the Christmas holiday period. This impacted both our customer metrics and sales across the group. Our customer surveys also showed a meaningful increase in customers across all segments telling us they are struggling to make ends meet given the material increases in mortgages, rents, utilities, insurance and other key household expenses. We know our customers shop in our stores multiple times a week and grocery price increases are very visible to them.
This, together with customers feeling they have some control over their food and grocery budget brings grocery price increases into sharp focus. Importantly, food inflation has continued to moderate materially in Australia and New Zealand as external inflationary pressures abate. And in Q3, our average prices were broadly flat compared to the prior year. Turning to the detail in our results. Group sales increased by 2.8% to $16.8 billion for the quarter, and Australian Food sales increased by 1.5% to $12.6 billion. In Australian Food, Woolworths Food Retail sales increased by 1.5% on an adjusted basis.
On a reported basis, sales increased 1.3% or 2.5% excluding tobacco. Sales growth was impacted by a strong Q3 last year and an ongoing moderation inflation, mainly driven by ongoing deflation in fruits and meat supplemented by lower inflation in grocery food Everyday Needs and Everyday Chilled. Comparable items declined 0.5% in the quarter, impacted by the cycling of collectibles campaign in the prior year as well as some availability challenges in Fresh categories in January and February and more broadly in rigs due to the CO2 shortages. Pleasingly, item growth improved over the quarter and returned to growth in March and April. Woolworths Food Company's owned and exclusive brand sales grew 2.3% in Q3 with item growth of 1.8%. Categories such as pantry, frozen foods and household care performed strongly, reflecting the value offered by our own brands in these categories....
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Woolworths Group Limited (WOLWF) Q3 2024 Earnings Call Transcript