- Woolies delivers solid quarterly sales result
- Guidance reiterated, so only minor changes to earnings estimates
- Brokers attracted to defensive earnings growth
- BA-ML the only negative view following upgrade by Macquarie


By Chris Shaw

While a tough operating environment has forced the likes of David Jones ((DJS)) to lower earnings guidance, the non-discretionary nature of the core food and liquor operations of Woolworths ((WOW)) has allowed for the reiteration of full year guidance post June quarter sales results.

For the June quarter Woolworths reported a 5.4% lift in group sales when adjusted for Easter, the core food and liquor operations delivering like-for-like growth of 3.3%. The result was broadly in line with expectations, with Big W delivering the strongest result in boosting sales by 2.0%.

The Big W result was outstanding given the tough operating environment according to RBS Australia, especially when compared to the problems of David Jones. The main negative for Woolies was a rapid slowing in momentum in the consumer electronics business, something RBS suggests could have implications for the likes of JB Hi-Fi ((JBH)) and Harvey Norman ((HVN)).