David Jones continues positive momentum ahead of ownership transition

South African owned Woolworths Holdings Limited has released its interim results for the first half of FY23. Included in the report is David Jones and Country Road Group’s results.

Woolworths Holdings Limited (WHL) has reported its businesses in ANZ “continued their positive momentum, notwithstanding the increased inflationary pressures faced by consumers during the period.”

David Jones is reported as a discontinued operation in the agreement for WHL to sell its entire shareholding in the subsidiary. According to the report, David Jones saw a notable improvement in the business’ underlying operational and financial health. WHL attributes this to a successful turnaround strategy. For the period, turnover and concession sales increased by 31.8 percent and by 27.6 percent on a comparable store basis, with flagship and CBD stores performing ahead of expectations as Aussie consumers made their way back out to in-store shopping. Similarly reflecting this sentiment, online sales contributed 17.2 percent of total sales, compared to 28.1 percent for the prior period.

David Jones’ expenses increased by 15.5 percent, however, WHL highlights that is increase was offset by savings arising from the successful execution of cost-saving initiatives.

Adjusted operating profit grew by 245.8 percent to $106.5 million, returning an operating profit margin of 8.3 percent, compared to 3.2 percent in the prior period.

WHL also reported on Country Road Group performance, with sales growing by 25.5 percent and by 26.6 percent in comparable stores, underpinned by strong performances from the Country Road, Politix and Witchery brands in particular. Online sales contributed 26.1 percent to total sales, compared to 33.8 percent for the prior period.
As with David Jones, expenses similarly increased by 22.0 percent. Adjusted operating profit increased by 94.2 percent to $93.2 million, returning an operating profit margin of 15 percent, compared to 9.7 percent in the prior period.

Woolworths Holdings Limited anticipates the transaction of David Jones ownership to Anchorage Capital Partners to complete by the end of March 2023.

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