Woolworths has reported a 3.6 per cent rise in its group sales to $69 billion for the current financial year despite major disruptions during the first half.
The group’s net profit after tax dropped 17.1 per cent to $1.3 billion year-on-year, reflecting increased financial costs and a lower EBITDA, which fell 3.5 per cent to $5.7 billion. Gross margin declined slightly from 27.3 per cent to 27.2 per cent.
The group’s Australian food arm sales rose 3.1 per cent to $51.4 billion, its gross margin flat at 28.6 per cent, while its EBITDA fell 3.9 per cent to $4.7 billion. The segment’s growth was attributed to health and wellness, drinks, and frozen food sales, with its own-brand sales growing 5 per cent, outperforming branded sales growth.
Woolworths’ digital media, Everyday Rewards system, and e-commerce arm, WooliesX, saw a significant growth of 16 per cent in sales to $9.6 billion.
WooliesX’s e-commerce segment, eComX, saw a 17.4 per cent increase in sales to $7.3 billion, driven by its same-day and on-demand offerings, with its Milkrun service expanding to 515 stores in the last fiscal year.
In digital and media, weekly average traffic to group digital platforms reached 29.2 million in the last quarter of the financial year, with Woolworths app users increasing by 14.8 per cent.
The company’s Everyday Rewards and services sales increased by a normalised 9.8 per cent, with active members reaching 10.4 million, including 500,000 new members joining over the year.
The Everyday Rewards program added Petstock, Chargefox, and Westpac as rewards partners.
Woolworths’ B2B sales grew 4.1 per cent to 5.7 per cent, with its EBIT increasing 15.8 per cent to $137 million, driven by improved utilisation of cross-dock warehouses and double-digit growth from PFD Foods.
New Zealand sales grow
In New Zealand, the company’s total sales rose 3.4 per cent to NZ$8.2 billion (AU$7.4 billion), with its EBITDA reported at $515 million, representing a 15.6 per cent increase. Gross margin rose from 22.5 per cent to 22.7 per cent year-on-year.
The group’s New Zealand sales growth was attributed to strong item growth in its meat, fruit, and vegetable offerings.
Mixed results for W Living
Woolworths’ W Living arm, which includes Big W, Petstock, Woolworths MarketPlus, and Healthylife, recorded a 9.9 per cent increase in its total sales to $5.6 billion and a 3.9 per cent increase in EBITDA to $234 million.
However, the Big W discount department store business saw a decline in sales of 0.8 per cent to $4.46 billion, with EBITDA down 19.7 per cent to $180 million.
The chain’s toys department saw the highest sales growth, while double-digit increases in unit sales drove sales growth in its home category, with Big W’s e-commerce sales at $489 million.
In June, Woolworths announced the closure of its MyDeal marketplace to instead focus on its retailer-led marketplaces, including Big W Market and Everyday Market, resulting in a non-cash impairment of $45 million.
Moving forward, Woolworths expects an improved financial performance driven by its Australian food arm, a return to profitability in Big W, and continued recovery in its New Zealand food segment.
“In F26 we expect to return to profit growth following a disappointing F25,” said Woolworths group CEO Amanda Bardwell.
“We will continue to rebuild customer trust through compelling value and retail execution excellence, simplify the way we work, and become a more focused, lower-cost retailer with a differentiated food offer at our core.”
