Woolworths Limited (WOW) operates supermarkets, specialty and discount department stores, a liquor business and electronics stores throughout Australia.

The company manufactures processed foods, exports and wholesales food and offers petrol retailing. WOW’s hotel operations include pubs, food, accommodation, and gaming.

1Q13 Sales

WOW’s 1Q13 sales continued to show an improving sales trend. Sales from continuing operations were $14.8 billion for the quarter, up 4.7% on the prior corresponding period.

The supermarket division (including liquor), which accounts for ~88% of sales, reported a 3.4% rise in sales to $12.99 billion.

Areas growth

While a majority of WOW’s 1Q13 sales were good without being great, there were a few standout divisions. Big W reported like-for-like (LFL) sales growth of 3.4%, showing the success of the group’s recent marketing campaigns.

The group’s newly entered Masters Home Improvement segment showed spectacular growth, with 62.2% increase in sales. Most of this was driven from seven new store openings in one quarter and greater brand recognition.

The company plans to open 150 stores over the next five years, with at least 30 stores to be opened by the end of FY13. We believe that exposure to this sector can only be beneficial to WOW’s earnings in the long run.

Looking forward

A real solid sales trend has begun to emerge for WOW and 1Q13 sales may continue this positive trend. Another fact we like about the group is that such a large proportion of its sales come from the more reliable supermarket division, as this provides more consistent earnings.

WOW’s ability to generate cash will become increasingly important to fund the Masters Home Improvement expansion and we believe this will be beneficial to WOW going forward.

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Woolworths (WOW) is primarily an Australian and New Zealand supermarket company, and is widely considered among the market’s blue chip stocks.

WOW has branched our beyond its supermarket business and has built a massive empire which boasts an array of brand retailers and a heavy sprinkling of supermarkets throughout every major city in Australia.

On 18 April, WOW reported a 5.1% increase in third quarter sales from a year earlier.  The group also reaffirmed its full year guidance of 5% – 8% profit growth.

WOW said that sales were impacted by continued price deflation as well as the recent natural disasters.

The trading environment was likely to remain difficult due to a combination of lower consumer confidence, inflationary uncertainty, potential rate hikes and a stronger Australian dollar.

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Coca-Cola Amatil (CCL) is an Australasian bottler for US-based The Coca Cola Company.

CCL manufactures, sells and distributes Coca-Cola products, including carbonated soft drinks, mineral waters and other non-alcoholic beverages, plus packaged fruit.

CCL was one of the shares to buy in the first half of 2010, surging from $10.50 to a high of $12.51 in October.

On 21 March, CCL signed a 10 year agreement with US-based Beam Global to manufacture, sell and distribute its premium spirits portfolio in Australia.

Beam will continue to deliver the portfolio’s advertising, sponsorship and promotions.

Due to its increased responsibilities, CCL expects its working capital to increase by between $30 million and $35 million.

For more Coca-Cola Amatil information and free Consumer Staple Stocks News, click here.

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