Woolworths has seen a big boost in profit and earnings after dropping the Australian department store chain David Jones.

In a trading statement for the 52 weeks ended 25 June 2023, Woolworths said that its Earnings per share (EPS), Headline EPS (HEPS) and adjusted diluted HEPS (adHEPS) were expected to be 20% higher than the reported prior year.

The current financial year only had a 9-month contribution from David Jones, whilst the prior year had a full 12 months.

However, the group said its earnings are now expected to be far higher than the prior 20% predictions.

Below are the Total group expectations for the 52 weeks ended 25 June 2023:

David Jones sale

Woolworths completed the sale of David Jones to Anchorage Partners in March 2023, which took about R17 billion of liabilities off Wooloworth’s books.

Woolworths acquired David Jones in 2014 for roughly A$2.2 billion (about R22 billion at the time).

“The history here has been a painful one. The transaction allows us to overnight improve our return on capital by several percentage points,” Woolworths Chief Executive Officer Roy Bagattini said.

Woolworths initially tried to replicate its success in the South African food business with David Jones, but it simply didn’t work, with Bagattini noting that the retailers are fundamentally different.

Whereas Woolworths sells mainly its own-branded goods, David Jones looks to offer other brands.

Woolworths does still own the flagship store in Melbourne, which is being leased to David Jones on a long-term basis on market-related terms.

Woolworths said it is returning to its core clothing range while refocusing on its five local brands and other Australian business Country Road.