WOOLWORTHS Ltd expects its fiscal 2009 net profit to rise by up to 14 per cent after the retail giant posted a 10.3 per cent lift in first half earnings.
Net profit for the 27 weeks ended January 4 rose to $983.3 million, from $891.3 million in the previous corresponding period.
Woolworths declared an interim dividend of 48 cents, up 9.1 per cent. Earnings before interest and tax (EBIT) jumped 10.2 per cent to $1.515 billion in the first half.
The company said it expected EBIT to continue to grow faster than sales in fiscal 2009, and flagged full-year sales from continuing operations to grow in the upper single digits, excluding petrol sales, on a 52-week basis.
Woolworths said consumer confidence and discretionary spending levels were hard to predict due to macro-economic factors such as petrol prices, interest rates and inflation.
Trading for the third quarter has continued on a similar trend to that experienced in the first half 2009, the company said in a statement.
Sales for the 27 weeks ended January 4, 2009, rose 8.8 per cent to $26.114 billion across the group, but gross profit margins contracted by 0.24 per cent.
Margins on Woolworths' cost of doing business contracted by 0.31 per cent over the first half year, down to 19.52 per cent, while EBIT to sales margin increased by 0.07 per cent to 5.8 per cent.
New Zealand Supermarkets was the only division to post a sales decline, down 1.2 per cent to $2.132 billion.
The strongest sales rises came from petrol, rising 15 per cent, then consumer electronics, up 14 per cent, and sales at Big W rose 10 per cent.
Earnings before interest, tax, depreciation and amortisation climbed 11.7 per cent to $1.887 billion, driving earnings per share up 9.3 per cent to 80.9 cents for the half year.