Woolworths’ share price fell as much as 4.6% to R70 on the JSE on Thursday after the company reported a decline in interim earnings following heavy promotional activity in SA and Australia. The share price ended the day 3.94% lower at R70.50. This is the first time since December 2007 that the top-end retailer has failed to grow its earnings, though market commentators are optimistic about its long-term prospects. Kagiso Asset Management’s Simon Anderssen said competition had led to sector-wide discounting over the past six months, slowing sales growth at Woolworths. "It resulted in operating profit declining for the first time in many years and was the main cause of the decline in earnings for the period. "Future profitability should recover as [it] adjusts to different levels of sales activity and optimises its costs base," he said. Woolworths derives 58% of its operating profit from Africa and 42% from Australia.
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