Woolworth issue profit warning due to falling sales
July 31, 2008
Woolworths have issued a warning that they are to miss profit forecasts for the year after sales continued to fall.
Shares in the troubled retailer fell to 5.93p down almost 9% after it announced that like for like retail sales fell 6.7% which covers the period for the six weeks to July 26.
Finance director for Woolworths, Stephen East said that even though the company usually makes a loss in the first half of the year, this year’s loss will be more than in previous years. Woolworths had also been expecting pre-tax profits of about £25m for the whole year, but believes it is unlikely to hit this target.
At the moment Woolworths is without a chief executive after Trevor Bish-Jones was asked to resign. The company has said its still early days in the search for a replacement for him.
Richard North, the Chairman said they will now be looking to concentrate on small and medium sized store to buffer the damage caused by bad sales of toys, clothes and outdoor items.
Mr North also said there was “still considerable opportunity” for Woolworths to expand in the value retail market. He didn’t rule out the sale of more of its bigger stores.
Mr North said “We are working hard to fix our problems. Clearly, in line with many of our peers in the retail industry, there have been tough conditions in a fiercely competitive market. The board is continuing its search for a new chief executive to take the group forward on to its next stage of development.”
The groups sales fell 3.1% in the 25 weeks until July 26, following higher sales of cheaper CD’s and DVD’s and lower sales of higher priced clothing. Woolworths blamed poor weather for the slow performance in sales of outdoor clothing and goods.
Visit www.woolworths.co.uk for more information on the retailer.
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