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Big W Q3 Sales Up, Profit Wobbles

Embattled discount department store, Big W, has further propelled its turnaround strategy, reporting a 7.4% lift in Q3 same-store sales. Despite this, the retailer warns profitability remains a challenge.

The results follow a 5% jump in same-store sales in the December quarter, and 1.2% decline the same time last year.

Parent company, Woolworths Group, asserts Big W Easter-adjusted sales growth climbed 5.6%, driven by its ‘Everyday, Leisure and Home’ categories.

“The challenge for Big W remains converting strong sales growth into improved profit and we continue to expect a loss before interest and tax of $80 million – $100 million in F19,” adds Brad Banducci, Woolworths Group Chief Executive.

“As foreshadowed on 1 April, Big W sales growth has been strong with Easter-adjusted comparable sales growth of 7.4%.”

[Woolworths Group]

For the thirteen weeks to March 31, Big W online sales soared 167%, with pick up remaining the strongest contributor to growth.

Online penetration claims to have more than doubled versus the previous year, now representing 4.1% of sales.

The retailer affirms customer metrics have further improved, with store controllable VOC jumping to 80% in March – the highest level since the launch of the survey in May 2018.

Big W claims it’s proof customers continue to notice store improvements, with brand metrics and price perception also lifting.

Sales growth across the quarter was driven by strong transaction growth, with items per basket driving double-digit comparable item growth.

During the quarter, Big W opened one store and closed another, notching 183 outlets in total.

Despite the strong sales growth, Woolworths affirms Big W profit improvement is slower than planned, citing a slower recovery of higher margin categories (e.g. apparel) and stockloss challenges.

Woolworths Group F19 results announcement is currently scheduled for August 29, 2019.

[Woolworths Group]

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