Australia's Woolworths sees tough year in retail gloom
Australian retailers have had a tough year, as frugal consumers spend less and save more and as fierce competition cuts grocery prices, while a boom in the resource sector failed to provide a major lift to many other parts of the economy.
Consumer sentiment has remained soft despite official interest rate cuts from the Reserve Bank, and central bank governor Glenn Stevens warned on Friday that there was a risk of Australia talking itself into more gloom.
"It is quite understandable everybody feels uncertain. I have begun to wonder whether we in Australia worry about the Greek economy more than the Greeks do, almost," Stevens told a parliamentary committee.
Confidence may well take another hit in coming months amid widespread worries of an end to the mining boom that has carried Australia's economy through the past few years and helped it to withstand the global financial crisis.
Woolworths said retail trading conditions in the current year to June 2013 would remain challenging and earnings would grow between 3 and 6 percent, below analyst expectations of 7.8 percent growth.
"There will be some disappointment in this rate of growth," said Peter Esho, chief market analyst at City Index.
Investors initially pushed Woolworths shares down 3.1 percent, in a broader market down 0.8 percent. The shares trimmed losses to trade down 1.4 percent at 0120 GMT.
Net profit in the second half fell 13.2 percent to A$850 million ($891 million), including a restructuring charge, from A$962.3 million in the year ago period, based on Reuters' calculations from reported full-year figures.
Source: reuters.com
