David Jones and Country Road Group parent Woolworths (South Africa) has revealed that strong online sales was a key driver of improved performance at the end of last year.
In a trading update, Woolworths (South Africa) reported that the easing of COVID restrictions also helped David Jones (DJs) and Country Road Group (CRG) deliver positive results, after having been negatively impacted by government-mandated store closures.
"In Australia, while the 12-week lockdown in the State of Victoria negatively impacted sales for the half, the easing of COVID-19 restrictions, together with the extended JobKeeper relief, our successful Black Friday and Cyber Monday campaigns, and further growth in our online sales, contributed to an improved performance in the last six weeks of the reporting period," Woolworths said in a statement.
Over the 26-week period to 27 December 2020, DJs sales declined by 8.8% and by 10.5% in comparable stores.
However, excluding Victorian stores, DJs, including online, grew by 5.9% in the 26 weeks ended 27 December 2020.
Its online sales increased by 55.5%, contributing 17.7% to total sales over the half.
Meanwhile, in the CRG business, new product ranges at Country Road underpinned performance in the period.
Similarly impacted by store closures, CRG sales over the half declined by 5.2% and by 2.4% in comparable stores.
Excluding Victorian stores, the balance of the CRG business, including online, grew by 8.2%.
CRG's online sales increased by 52.5%, and contributed 31.6% to total sales for the period.
"Trading conditions across the Group continued to be impacted by COVID-19, with significantly reduced store footfall, particularly in larger shopping centres and CBD locations," Woolworths said of the results.
"Considered actions to stimulate trade, strengthen online capabilities, manage inventory levels and execute property sales, have resulted in positive cash flows and a continued reduction in net debt levels in both South Africa and Australia," Woolworths said.
Overall, Woolworths (South Africa) reports that it expects headline earnings per share (HEPS) for December 2020 to be up 50-60%.
These earnings were impacted by the sale of the DJs Bourke St Mens property (pictured), which resulted in proceeds of AUD$121.0 million and a profit on sale of approximately AUD$23.5 million.
The earnings were also impacted by the renegotiation of various David Jones leases, which resulted in lease modification and cancellation gains of approximately R667 million (AUD$57.2 million) (pre-tax), which were recognised in the period.