Australia's largest supermarket chain, Woolworths, reported a 9.6% jump in fourth-quarter sales, and upgraded its full-year profit outlook, as it continues to take market share from struggling rival Coles Group.
Comparable sales growth in its core food and liquor business was the strongest in years at 8.2 percent, up from 4.3 percent in the fourth quarter of 2006, although some investors who had been hoping for a bigger profit upgrade were disappointed.
Woolworths shares fell more than 2 percent following the release, although the stock remains near record highs. One analyst said the new guidance for 25-27 percent annual profit growth was still below some market forecasts for 28-29 percent growth.
Woolworths said fourth-quarter sales rose 9.6 percent to A$9.83 billion ($8.5 billion) from A$8.96 billion. Analysts at JP Morgan had forecast a 7.6 percent rise, and Citigroup had estimated a 9.0 percent increase.
The profit upgrade from a previous growth forecast of 20-24 percent, brought it closer in line with a median estimate of 27.7 percent growth to A$1.295 billion, according to Reuters Estimates.
For the 12 months, Woolworths sales rose 12.6 percent to A$42.48 billion. That compares with analysts' forecasts of A$42.3 billion, according to a survey of 11 analysts by Reuters Estimates.
The 8.2 percent rise in comparable food and liquor sales was well ahead of a 0.8 percent rise in comparable sales posted in its latest third quarter by Coles, which is being bought by conglomerate Wesfarmers.
The sale of Coles blocked Woolworths' ambitions to acquire two of its rival's general merchandise units, business supplies chain Officeworks and either discounter Kmart or Target. Wesfarmers has said it does not intend to sell off any parts of the Coles group.
Woolworths has also been stymied in its plans to expand in New Zealand after the competition regulator rejected an application to allow a full takeover bid for general merchandise retailer The Warehouse. Woolworths has appealed the decision.