Woolworths Group Delivers Strong Half-Year Result with EBIT up 14.4% as Sales Momentum Builds

About Woolworths Group

Woolworths Group Limited (ASX: WOW) is one of Australia and New Zealand’s largest retailers, employing approximately 190,000 team members and serving millions of customers each week across its network of supermarkets, discount department stores and digital platforms. Headquartered in Bella Vista, New South Wales, the Group operates an extensive portfolio of businesses focused on food, everyday needs and complementary services.

The Group’s core division, Australian Food, includes Woolworths Supermarkets, Metro and eCommerce operations. In New Zealand, Woolworths operates a national supermarket network following the completed rebranding of its Countdown stores to the Woolworths brand. Woolworths Group also owns BIG W, Petstock and Primary Connect, alongside digital and data businesses including WooliesX, Everyday Rewards, Cartology and insurance and mobile services.

Australian Food Performance Strengthens

Australian Food sales increased 3.6% to $27.6 billion, while EBIT rose 9.9% to $1.51 billion. Excluding the impact of prior industrial action and supply chain transition costs, EBIT growth was stronger on a comparable basis.

Customer value remains front of mind, with price continuing to rank as the top consideration for Australian shoppers. Woolworths expanded its Lower Shelf Price program by adding more than 350 products in the half, bringing the total range to over 800 products. Increased promotional activity, enhanced Rewards campaigns and investment in Fresh departments supported improved customer metrics.

Fruit and Vegetable Voice of Customer scores improved, and overall VOC NPS lifted to 50, up six points compared to December 2024. Woolworths Food Retail item growth strengthened through the half, with sales momentum improving in the second quarter.

eCommerce continued to perform strongly, with Group online sales up 14.6% to $5.4 billion. Over one million additional online delivery and pick-up slots were unlocked in December, and 43% of online delivery orders in Q2 were fulfilled within two hours, reflecting network expansion and improved operational capability.

New Zealand and BIG W Show Improvement

New Zealand Food sales increased 2.8% in NZD terms to NZ$4.4 billion, with EBIT up 22.4% to NZ$100 million. Transformation initiatives, including the completed rebranding of stores to Woolworths and improvements in own-brand ranges, supported the uplift in profitability.

BIG W delivered a significant turnaround, with EBIT rising to $70 million, up 122.5% on the prior corresponding period. Sales growth of 1.8% was supported by improved seasonal execution, clothing performance and cost discipline. Management noted profitability remains weighted to the first half, but BIG W is on track to be EBIT and cash flow positive for FY26.

Petstock and other W Living businesses also delivered double-digit EBIT growth, contributing to a 185.6% increase in W Living EBIT overall.

Cost Discipline and Capital Management

Woolworths delivered $400 million in run-rate above-store cost savings, in line with its target. Savings were driven across support office, goods not for resale, marketing and IT, with productivity improvements helping offset inflation and fund value investment for customers.

Cash from operating activities before interest and tax rose to $3.2 billion, up 4.5% on the prior year, with a strong cash realisation ratio of 95%. Net debt to EBITDA improved slightly to 2.7 times, supporting the Group’s solid investment-grade credit ratings.

The Board declared a fully franked interim dividend of 45 cents per share, up 15.4%, broadly reflecting the increase in NPAT before significant items. The dividend reinvestment plan will be satisfied via on-market purchases, with no discount applied.

Technology and AI Driving Operational Gains

Woolworths continues to invest in digital capability and artificial intelligence to enhance both customer experience and operational efficiency. More than 31 million average weekly visits were recorded across Group digital platforms, up 3.1% year on year, with 2 million active weekly app users, up 10.2%.

AI-powered tools are being used to optimise eCommerce fulfilment, workforce planning and marketing processes. The Group’s digital assistant “Olive” is set to be further enhanced through an extended partnership with Google to deliver a more personalised and conversational shopping experience.

Sustainability Progress

The Group reported continued progress against its sustainability targets, including 100% green electricity across operations and progress towards its 2030 net zero Scope 1 and 2 emissions targets. More than 600 stores have re-established soft plastic recycling services, with over 100 added during the half.

Total Recordable Injury Frequency Rate declined 5.4% year on year to 12.32, reflecting ongoing investment in team safety.

Outlook

Trading in the first seven weeks of the second half has been strong in Australian Food, with Woolworths Food Retail sales up 5.8%, or 7.2% excluding tobacco. Management expects FY26 reported EBIT growth at the upper end of the previously guided mid-to-high single digit range, provided current trading conditions persist.

In New Zealand, transformation initiatives will continue amid a challenging economic and competitive backdrop, while BIG W remains focused on sustaining trading improvements in the second half.

Woolworths said it remains committed to delivering long-term sustainable growth through disciplined capital allocation, productivity gains and continued investment in customer value and convenience.