David Jones owner warns of tough trading
The owner of David Jones, South African department store chain Woolworths Holdings, warned on Thursday that annual profit would fall by up to 20 per cent, hurt by "extremely" challenging trading conditions in its home market and Australia.
In a trading update for the year to June 24 released on the Johannesburg Stock Exchange, Woolworths said David Jones sales increased by 2.2 per cent in the second half and by 2.7 for comparable stores.
On a full-year basis, sales finished 0.9 per cent lower and 0.4 per cent lower on a same-stores basis.
Woolworths announced in January that it had booked a non-cash impairment charge of $712.5 million against the carrying value of David Jones as a result of the cyclical downturn and structural changes that have hurt performance across the Australian retail sector.
Woolworths, which sells groceries, food, homeware and clothes, said that headline earnings per share (HEPS) for the 52-weeks ended June 24 would weaken to between 336.7 to 357.8 South African cents (34.3 cents to 36.5 cents).
HEPS is the most widely watched profit gauge in South Africa and strips out certain one-off items.
A Reuters poll of 10 analysts forecast an 8.5 per cent drop.
Earnings per share are expected to slide to a loss of between 340 cents to 396.7 due to a revaluation of its David Jones business in Australia.
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