Woolworths targets up to 6% growth in FY12 net

Woolworths targets up to 6% growth in FY12 net

Woolworths (ASX:WOW) is forecasting an up to 6% profit growth in FY12, despite expecting “subdued” trading over the year.

In its annual report, Woolworths managing director Michael Luscombe advised shareholders it is very difficult to accurately predict the company's performance for the financial year ahead.

The company's results for 2H11 in particular had been impacted by the slump in consumer confidence, and the effects are likely to continue into the current year.

But Luscombe added that Woolworths remains “well positioned in all its market segments,” with a business model geared to the less discretionary retail segments.

As a result, the company is forecasting net profit growth of 2-6% for the financial year.

Earnings will be impacted by a start-up investment of around $100 million for its Masters hardware retailing joint venture with US partner Lowe's. This is net of the earnings contribution from Danks, which the partners had acquired to support the Masters venture.

Woolworths aims to open 15-20 Masters stores per year initially, and a total of 150 stores within five years. The company also targets 15-25 new supermarkets in Australia - and 3-5 in New Zealand - per annum.

Woolworths grew its FY11 profit 5.1% to $2.12 billion. Barring disaster costs, profit would have increased 6.4%. Despite the difficult retail environment, total sales grew 4.7% to $54.14 billion.

WOW shares grew 0.57% on Tuesday to $24.910.

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Tags retailfinancial resultswoolworthsGuidanceASX:WOWDavid Luscombe

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