Woolworths Drops as Prices Fall More Than Expected: Sydney MoverAngus Whitley
Woolworths Ltd., Australia’s largest retailer, fell in Sydney trading after its domestic food and liquor prices declined more than analysts expected last quarter.
Woolworths shares fell as much as 4 percent and closed 1.6 percent lower at A$33.22. The benchmark S&P/ASX 200 index rose 1 point to 5,047.2 at the close of trading in Sydney.
Average prices at the company’s Australian food and liquor business fell 3.5 percent in the quarter ended June 30, while prices over the year dropped 2.9 percent, Sydney-based Woolworths said in a statement today. Prices were expected to drop 2.5 percent in the quarter, based on the median of three analyst estimates compiled by Bloomberg.
“Challenging economic conditions were particularly evident as the quarter progressed,” Chief Executive Officer Grant O’Brien said in the statement. The period was “underpinned by consumer uncertainty and low growth in disposable income.”
Australian consumer confidence has softened amid the end of a mining boom and a weaker local currency. Total fiscal fourth-quarter sales at Woolworths, which also owns the Big W chain, climbed less than 1 percent to A$14.1 billion ($12.8 billion), when adjusted for an extra week this year. The result was “underwhelming,” Patersons Securities Ltd. said in a report.