Woolworths share price: Understanding the FY20 results in 60 seconds

We examine some of the key highlights from Woolworths 2020 results release.

Supermarkets giant Woolworths (WOW) saw its share price run higher after releasing its full-year (FY20) results to the market.

Understanding Woolworths FY20 results in under 60 seconds

Looking at the highlights from these results, on a year-over-year basis, WOW reported:

  • Group sales of $63,675 million, up 8.1%
  • Online sales of $3,523 million, up 41.8%
  • Group earnings (EBIT) of $3,219 million down 0.4% against profits (NPAT) of $1,602 million, down 1.2%

Woolworths finished out the session up $1.110 or 2.83 % at $40.38 per share.

FY20 results unpacked

Investors look to have been impressed by Woolworths top-line performance, while seemingly looked through weaker profitability and dividends.

Looking at the performance of Australia Food – which remains the company's largest and most important operating segment – Woolworths recorded total sales of $42.2 billion, representing an impressive 8.3% increase, on a year-over-year and normalised basis.

On a more granular level, the company attributed the strength of its first half sales to its Lion King Ooshies and Woolworths Discovery Garden Campaigns; while its second half performance, which saw sales grow 10.4%, was driven by pantry stuffing activity and elevated levels of in-home consumption, management said.

It was however flagged that during May and June, customer shopping behaviours adjusted as movement restrictions eased across the country.

For the full-year, the company saw gross margins improve 47 basis points, to 29.2%. Management attributed this improvement to 'COVID-19 related product mix changes, improved stock loss and an ongoing focus on improving promotional effectiveness.'

Woolworths New Zealand Food arm experienced comparably strong top-line growth, with sales increasing 9.1% on a normalised basis to $6,589 million. Earnings (EBIT) rose in step, increasing 10.7% for the full-year.

Elsewhere, Big W and Endeavour Drinks both recorded robust sales growth; while Hotels witnessed steep declines, with sales down 19.5% and earnings (EBITDA) down 31.4%. Weakness in Hotels was primarily attributed to government mandated closures

Lastly, the WOW board today declared a final dividend of 48 cents per share, bringing the full-year (FY20) dividend payout to 94 cents per share.

While this represents a decline of 7.8% on the company’s FY19 dividends, the FY20 dividend is broadly in line with last year’s when 'Excluding non-comparable Petrol earnings in the prior year and the impact of the 53rd week,' the company noted.

Want to take a position in WOW, long or short?

Create an IG trading account or log in to your existing account to get started now.

The analysts take

Analysts from Citibank responded with little enthusiasm to WOW’s FY20 release, maintaining their Neutral rating and price target of $41.50 per share. Even so, the investment bank said: ‘We expect ~3%-4% consensus earnings upgrades from the continued sales strength and reduction in COVID-19 fixed cost run-rate

‘The outlook has improved as incremental COVID-19 fixed costs have moderated and sales momentum has remained strong into early FY21e,’ Citi analysts also noted.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.