Woolworths Ltd. Turns to Loss After Failing at Home Improvementsby
Net loss of A$1.23 billion is first since listing in 1993
CEO Banducci sees “early signs of progress” in turnaround
Woolworths Ltd. slumped to its first annual loss since listing in 1993 because of the cost of exiting its failed home improvements business.
The net loss at the Australian supermarket chain was A$1.23 billion ($937 million) in the year ended June 26, compared with a profit of A$2.15 billion a year earlier. Sales from continuing operations fell 1.2 percent, Woolworths said in a statement Thursday.
Chief Executive Officer Brad Banducci, who took over in February, is overhauling the company by lowering grocery prices, cutting jobs and slowing the pace of store openings. He said he’s seeing early signs of progress in a turnaround that will take as long as five years.
“While we are seeing early signs of momentum, we are not underestimating the size of the task that lies ahead,” Banducci said in the statement. “We expect the market environment to remain competitive in the year ahead.”
Woolworths, which struck a home improvements partnership with Lowe’s Cos more than six years ago, accepted defeat earlier this year and booked a A$3 billion charge to write down the assets and exit stores. After selling property sites and a fire sale of inventory, the Sydney-based company said Wednesday it expects to salvage just A$500 million.