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Woolworths Sales Down 0.6%, Margins Improve

Woolworths, the troubled sweets, CDs and stationery group, said underlying sales at its 818-store retail business have slowed.

Over the 17 weeks to June 2 like-for-like sales at the chain fell 0.6% -- a deterioration from up 0.8% for the first seven weeks of the period reported on March 28.

Woolworths said the performance was, however, in line with internal expectations and noted gross margin is "substantially ahead" of the prior year.

Third party sales at EUK, the group's entertainment wholesale business, rose 28.4% over the period.

2entertain, the group's joint venture with BBC Worldwide, has had a "good start" to the year with performance in line with internal hopes.