Woolies shares up on rosy Xmas outlook Woolworths' share price has enjoyed a welcome bounce after the retailer reaffirmed its annual profit forecast and painted a merry Christmas trading outlook. Chief executive Grant O'Brien and chairman Ralph Waters reassured shareholders on Thursday that the supermarket giant was on track to lift its profit by between four and seven per cent, despite disappointing first quarter sales. The news was a welcome relief for investors, who had been rattled by market analysts trimming their growth forecasts to three per following the soft first quarter. Many had expected Woolworths to cut its profit forecast, which it first issued in August when it reported an 8.5 per cent rise in profit for 2013/14. But Mr O'Brien said sale trends had been encouraging so far in the second quarter, which includes the key Christmas trading period. "Like many other retailers, we have started Christmas marketing and promotional programs earlier to strengthen the festive season's trading outcomes," he told Woolworths' annual general meeting. Woolworths shares jumped 67 cents, or 2.2 per cent, to $31.75. The stock, which hit a record $38.49 in April, has suffered heavy falls in the past month amid worries that its rival Coles is winning the supermarket sales war. Chairman Ralph Waters blamed the softer first quarter sales for dragging the company's share price down in recent weeks. "The market appears to have drawn conclusions about the company's outlook that your board does not share," he said. CMC Markets chief market strategist Michael McCarthy said investors were pleased that management had talked up the start of the second quarter and the potential for further improvement heading into Christmas. "The fact they stood by their profit guidance despite a soft first-quarter has surprised the market," he said. Mr O'Brien said while there would always be short-term fluctuations in the company's share price, Woolworths had a history of outperforming the market and its peers. He also maintained that while the company's home improvement business, which includes Masters, had suffered higher-than-expected losses, he was confident it would become a material profit contributor for the group over time. Shareholders expressed little concern about the Masters business and Woolworths' weaker share price during the meeting. Instead, one investor said she was disappointed that there were no sample bags at this year's meeting, while another raised moral concerns about the sale of halal meat.