By Mike Cherney


SYDNEY--Australian grocer Woolworths reported a large half-year loss, reflecting various one-time writedowns, and said that its longtime chief executive would retire.

Woolworths said its net loss for the roughly six months through December was 781 million Australian dollars (US$511 million), reflecting a previously flagged writedown of its New Zealand business and a loss tied to its investment in drinks and hotel company Endeavour. The figure compares with a net profit of A$845 million a year ago.

Stripping out the one-time items, net profit grew 2.5% to A$929 million. Revenue grew 4.4% in the half to A$34.63 billion, slightly ahead of market expectations of A$34.58 billion, as assessed by FactSet.

Despite the statutory loss, Woolworths said its interim dividend would be 47 Australian cents per share, up 2.2% and in line with profit growth before significant items.

The result was driven by the main Australian food unit, which recorded sales growth of 5.4% in the half. Discount chain Big W posted a sales decline of 4.1%.

CEO Brad Banducci will retire in September after 13 years at the company, and eight and a half as CEO. Woolworths said he will be replaced by Amanda Bardwell, who has led the company's digital arm WooliesX.

Looking ahead, the grocer flagged that sales at the start of the fiscal second half had moderated, reflecting lower inflation and a more cautious consumer. Australian food retail sales were up 1.5% in the first seven weeks of the half. In New Zealand, sales were up 1%. Woolworths said it is seeing early progress but that it will take time for transformation initiatives, such as the launch of a rewards program and a rebranding, in the New Zealand business to reach full potential.

At Big W, sales declined 6% to start of the second half. Although sales trends should improve in the fiscal fourth quarter, Woolworths said the second half is typically a lower profit period and that Big W earnings should be around breakeven for the half.

Australian supermarkets have come under scrutiny recently as cost-of-living worries rise. The government has directed Australia's competition watchdog to launch an inquiry to investigate the competitiveness of retail pricing and allegations of price gouging in the sector. An interim report is expected in August.


Write to Mike Cherney at mike.cherney@wsj.com


(END) Dow Jones Newswires

02-20-24 1732ET