Woolworths says its profits will be at the lower end of forecast |
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Published
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Tue, 05 Dec 2006 11:40
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LONDON: The U.K. retailing chain Woolworths Group Plc. said its full-year results will be at the lower end of analysts' forecasts as it has been facing a tough market and sales are not likely to pick up during the rest of the year, including the holiday season, which is now on.
The firm said during the 18 weeks ended 2 December, its like-for-like retail sales fell 6.5 per cent, though online sales picked up encouragingly during the beginning of the holiday shopping season.
Group chief executive Trevor Bish-Jones said even to meet the lower end of the predictions, the company will have to trade in the positive for the rest of the festive period. He said he would be reasonably confident that this will happen, but "we can't be dunk sure that will happen." Woolworths historically makes a major chunk of its profit in the fiscal second-half.
Analysts had been forecasting that Woolworths will have full year earnings in the range of 27.6 million pounds to 46.6 million pounds. Last year, the company had posted a profit of 57.7 million pounds.
The company said prices of its entertainment products are materially lower than last year, while sales of seasonal Christmas products are slow. Only sales of toy items have picked up. The company had started distributing catalogs for the first time in October and added net-based shopping. However, distribution costs have gone up beyond expectations.
The profit warning sent Woolworths' shares down 2-1/4 pence to 34-1/2 pence, valuing the business at 503 million pounds.
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