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Woolworths sees up to 10 pct fall in profit

Story from: TownPress

JOHANNESBURG – Annual profit at upmarket retailer Woolworths Holdings could fall by as much as 10 percent due to increasingly difficult trading conditions at home and in Australia, it said on Thursday

Woolworths, which sells clothing, groceries and homeware, said headline earnings per share – the main profit gauge in South Africa that strips out certain one-off items – was likely to fall by between 5 and 10 percent.

A Reuters poll of 12 analysts forecast a 6 percent drop.

“Growth in the second half was impacted by increasingly difficult trading conditions, in both South Africa and Australasia,” Woolworths said.

South African consumers have seen their spending power eroded by a volatile currency and a weakening economy, which slipped into a recession in the first quarter amid political turmoil.

Fierce competition in Australia, where global e-commerce juggernaut Amazon.com Inc recently set up shop, has also hit margins for the company’s David Jones and Country Road apparel chains.

Woolworths, similar in products and style to Britain’s Marks and Spencer, last posted an annual profit decline in 2009, when South Africa was in its previous recession.

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