Woolworths Group Ltd (ASX: WOW) shares are on the rise today after the supermarket giant released its half-year results for the period ended 3 January 2021 (HY21) this morning. At the time of writing, the Woolworths share price has jumped 1.15% to $39.54.
Let's take a look at how Woolworths has been performing.
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What's driving the Woolworths share price?
The Woolworths share price is on the move after the company reported total revenue from continuing operations of $35.8 billion for the period. This compares to $32.4 billion for the half-year ended 5 January 2020.
Woolworths also posted a gain in gross profit which jumped from $9.6 billion in HY20 to $10.5 billion in HY21.
Earnings before interest and tax were $2.1 billion, which is up from HY20's $1.8 billion.
Basic earnings per share (EPS) came in at 90.5 cents, a 28.1% leap from the 70.6 cents posted for HY20.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 8.7% at $3.4 billion for HY21.
At the end of the period, the business held $2.1 billion in cash and cash equivalents. The prior corresponding period (pcp) posted $1 billion.
Woolworths advised that coronavirus has had a material impact on results.
While the company reported strong group sales growth of 10.6% for HY21, this was offset by $277 million spent on incremental COVID-19 costs.
The board declared an interim dividend for the period of 53 cents per share, fully franked.
CEO commentary
Woolworths Group CEO Brad Banducci commented on the HY21 results and said:
H1 sales growth was strong across all Group businesses, with the exception of Hotels, with record Christmas trading. Group sales increased by 10.6% in H1 (Q2: +9.0%) with Australian Food, BIG W and Endeavour Drinks all reporting sales growth well above trend. Sales growth in New Zealand Food slowed in Q2 with lower market growth rates impacted by a reduction in international tourism. In Hotels, sales trends improved over the half but growth was below the prior year due to continued COVID-related operating restrictions.
Despite incremental COVID costs of $277 million and the Hotels EBIT being well below the prior year, H1 Group EBIT1 grew by 10.5% to $2,092 million, with NPAT1 up 15.9%. BIG W's profit improvement was a particular highlight with EBIT of $133 million, up 166% on the prior year.
Woolworths share price snapshot
Over the past year, the Woolworths share price has fallen by 7.3%. Whilst having mostly recovered from their May 2020 lows of around $32, Woolworths shares are yet to reach their pre-COVID highs of around $43.
Based on the current Woolworths share price, the company has a market capitalisation of around $50 billion with 1.3 billion shares outstanding.
