Woolworths forecasts 35% slide in first-half profits

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Australia's biggest supermarket chain, Woolworths, said that profits would fall by up to 35% for the six months to December.

The profit warning is the third from the retailer this year as it struggles to compete with rivals Coles and Aldi.

The news sent Woolworths shares down by almost 10%.

The company said in latest quarterly results on Thursday that sales fell 2.5% to A$15.75bn ($11.2bn; £7.3bn).

Woolworths expected net profit for the six months to December to be between A$900m and A$1bn, or 28% to 35% lower than the same period a year earlier.

Analysts have said that customers perceived Woolworths to be more expensive than Coles.

The supermarket said on Thursday it was investing more than $A500m into reversing falling sales.

The latest numbers come amid turbulent times for the grocery, alcohol and petrol giant.

In June, Woolworths said chief executive Grant O'Brien would step down by November.

That announcement came as the company sought to cut as many as 1,200 jobs and boost sales after its first-half profits fell.

Earlier this year there were also media reports of a possible takeover by US private equity giant KKR.

Consequences

Despite the disappointing results on Thursday, Mr O'Brien said he was "pleased with the positive steps" Woolworths was taking to transform its business.

The chairman, Gordon Cairns, said: "[We are] focused on making the best long-term decisions across all our businesses.

"There will be short-term consequences, but we are confident that the decisions we are taking are necessary."

Woolworths shares closed 9.8% lower in Sydney at $24.70, valuing the company at almost A$32bn.