AUS
NZ
UK
CA
USA
IND
Highlights
- Woolworths (WOW) reports mixed financial results for HY25 with a decline in profits.
- Industrial action and additional costs impacted earnings, despite a rise in sales.
- E-commerce division shows strong growth, while supermarket sales face challenges.
The share price of Woolworths (ASX:WOW) has dipped by 1% following the announcement of its FY25 half-year results. While the company saw a modest increase in sales, profitability faced headwinds due to industrial action, cost pressures, and softer consumer demand.
Performance Overview
Woolworths reported a 3.7% rise in total sales, reaching $35.9 billion in HY25. However, profitability declined, with underlying EBITDA down 4% to $2.96 billion and underlying EBIT falling 14.2% to $1.45 billion. Net profit after tax (NPAT) dropped 20.6% to $739 million, though statutory profit rebounded from a previous loss to match this figure. The company announced an interim dividend of $0.39 per share, representing a 17% reduction.
E-commerce remained a bright spot, with online sales surging 18.3% to $4.68 billion, highlighting a shift in consumer shopping habits.
Segment Breakdown
Supermarkets and Retail Performance
- Australian supermarkets saw a 2.7% increase in sales, reaching $26.7 billion, but underlying EBIT declined 12.8% to $1.39 billion.
- New Zealand food sales rose 2.7% to NZ$4.3 billion, with underlying EBIT improving 15.2% to NZ$82 million.
- W Living, the company’s home and lifestyle division, showed promising growth with sales rising 16.1% to $3.08 billion, while EBIT increased 2.8% to $15 million.
- The B2B segment reported a 5.5% growth in sales to $3 billion, driven by strong demand in quick-service restaurants. EBIT in this segment grew 9.9% to $78 million.
Key Challenges and Growth Areas
The Australian supermarkets division faced disruption from industrial action in November and December, which led to a $240 million reduction in sales and a $95 million hit to EBIT. Despite these challenges, the business saw early signs of improvement in 2H FY25, with Australian food sales growing 3.3% in the first seven weeks of the half.
Meanwhile, the company has invested in logistics, with the opening of the Moorebank distribution center, expected to enhance service to over 1,000 supermarkets across Australia.
Outlook
Looking ahead, Woolworths remains focused on stabilizing operations and improving profitability. With BIG W sales up 1% and continued momentum in New Zealand, the company is working to offset the challenges faced in its core Australian supermarket business. E-commerce remains a key growth driver, reinforcing Woolworths’ digital-first retail strategy.
