Food inflation shows no sign of moderation and team absenteeism is still above average but Woolworths says it is trying to return to normality after a financial year beset with challenges.
"The extremely challenging operating environment caused by supply chain disruptions, product shortages, team absenteeism and flooding led to an inconsistent customer experience and financial aspirations that was below our aspirations for the year," Woolworths Group chief executive Brad Banducci said.
The supermarket giant announced a net profit after tax of $1.51 billion for the year to June 26, up 0.7 per cent from the previous year.
Sales grew 9.2 per cent to $60.85 billion, up 9.2 per cent, while earnings before interest and tax (EBIT) were down 2.7 per cent to $2.69 billion.
E&P Financial Group analyst Phillip Kimber wrote in a note that overall Woolworths' results were about five per cent E&P's estimates and "broadly in line with consensus estimates".
Sales at Woolworths' Australian supermarkets were up 4.5 per cent to $45.5 billion, with EBIT up 0.3 per cent to $2.4 billion.
Team absenteeism at Woolworths supermarkets was 5.3 per cent in June as a percentage of total hours worked.
That's down from 6.5 per cent in January but up from about 4.5 per cent a year ago and a pre-COVID baseline of about 4.0 per cent.
Mr Banducci said Woolworths was extremely conscious of the challenges of inflation and the cost of living pressures facing customers.
He said the supermarket had seen value-oriented consumers substituting pork or chicken for beef, canned vegetables for the more expensive types of fresh veggies and buying fewer tobacco products.
They have also removed items from their trolleys more frequently.
"Our hypothesis has been that our our value customers will shop to dollar numbers as a disciplined way of budgeting what they do," he told analysts.
Food inflation had been significantly worse in New Zealand, which relies more on imports, he said.
Big W sales were down 3.3 per cent to $4.4 billion, with EBIT down 68.2 per cent to $55 million.
Woolworths said its strategic investments in digital, ecommerce and loyalty programs were starting to scale.
Active customers of its shopping app grew 22 per cent to 840,000, with business-to-consumer sales growing 42.3 per cent to $4.7 billion.
Its Everyday rewards program users were up 4.8 per cent to 13.7 million.
On September 6, MyDeal.com.au shareholders will vote on Woolworths taking an 80 per cent stake in the online marketplace.
Woolworths declared a fully franked final dividend of 53 cents per share, down 3.6 per cent from its 55 cents per share payout a year ago.
Excluding the Endeavour Group spin-off, it will pay a total of 92 cents per share in dividends this year, up 1.0 cent from FY2021.
At 1.31pm AEST, Woolworths shares were down 3.7 per cent to a one-and-a-half month low of $36.
WOOLWORTHS' EXTREMELY CHALLENGING YEAR
* Group sales up 9.2 per cent to $60.85b in the 52 weeks to June 26
* Group earnings before interest and tax down 2.7 per cent to $2.69b
* Group net profit after tax up 0.7 per cent to $1.5b
* Fully franked final dividend of 53 cents per share, vs 55cps a year ago.
