South Africas Woolworths has posted strong Q1 results

South Africa's Woolworths has posted strong Q1 results

South African retailer Woolworths Holdings said its food stores "traded ahead of the market" in the first half of its financial year, in which sales and profits from that side of its business grew.

Sales from Woolworths' food outlets were up 15.3% in the six months to 29 December to ZAR9.5bn (US$876.1m). Comparable-store sales in the retailer's food stores were up 11.8%

Adjusted pre-tax profits from Woolworths' food arm increased 16% to ZAR586m.

Woolworths did note a 0.2% fall in gross margin from its food stores to 25.2% as it invested in price and upped promotions.

The retailer, which also sells clothing and GM in its stores and owns the Country Road apparel and homeware chain in Australia, reported a 16% rise in overall sales to ZAR19.45bn.

Operating income for the group was also up 22.9% at ZAR2.09bn. Net profit increased 22.1% at ZAR1.57bn. Headline earnings increased by 18.5%

The group added it expected economic conditions in South Africa in 2014 to remain constrained but was confident that the "upper segment" in which it operated would continue to "show resilience."

"Trading for the first six weeks of the second half of the financial year has been positive, and we expect sales growth to be broadly in line with the first half," read the company's statement.