A year after FY25, where industrial action and supply-chain costs took some of the shine off Woolworths’ performance, FY26 looks a sturdier affair, even as the retailer carried a hefty provision linked to historical staff underpayments.
Earnings scaled across every trading division, Woolworths’ core Australian supermarket and online grocery business gathered pace in the second half, and Big W returned to profit.
Group sales went up 3.6 per cent to $71.5 billion, while underlying net profit climbed 15.4 per cent. EBIT before significant items increased 12.7 per cent to $3.1 billion. Separately, Woolworths recognised an additional $710 million pre-tax provision during FY26 following a Federal Court ruling over historical underpayments of salaried store team leaders.
Australian Food, which includes Woolworths’ supermarket stores, online grocery business, Everyday Market and Healthylife, remained the group’s biggest financial contributor. Sales rose 4.6 per cent to $53.85 billion, with growth bolstering in the second half. Woolworths also said supermarket prices excluding tobacco fell in every quarter of FY26, while more than 800 products were placed on its Lower Shelf Price program at an average reduction of about 16 per cent.
CEO’s strategy is paying off
Woolworths Group CEO Amanda Bardwell said the measures taken during the year were beginning to show through in the core grocery business.
“The action we have taken in F26 to deliver more value for customers, greater convenience and better execution has improved customer advocacy and sales momentum in our key Australian food business, particularly in H2,” she said. “Sales momentum together with strong productivity and cost discipline has delivered solid EBIT growth with an increased contribution from all trading segments.”
Digital continued to take a larger share of the weekly shop, with group e-commerce sales increasing 15.9 per cent, led by faster on-demand growth in the second half.
Across the Tasman, New Zealand food also improved over the full year. Sales rose 2.5 per cent in local currency to NZ$8.49 billion and EBIT increased 8.8 per cent to NZ$163 million, although the second half was tougher, with EBIT down 7.7 per cent.
“Lower sales growth, driven by a customer flight to value and disruption from the store operating model changes, led to a more challenging H2,” Bardwell said during the earnings call.
Big W supplied one of the year’s more conspicuous turnarounds. It recorded EBIT of $64 million, while e-commerce transaction value grew 26.7 per cent and own-brand sales rose 7.5 per cent.
The first eight weeks of FY27
The new financial year has started briskly with Woolworths Food Retail sales rising 7.6 per cent in the first eight weeks. Woolworths estimated Disney Ooshies contributed around 1.5 to 2 percentage points of that growth.
“We certainly saw some customers add a few more items to their baskets,” she said.
Bardwell mentioned pressure on household budgets was likely to remain a defining feature of the year ahead.
“While we expect the challenging economic environment to continue with household budgets remaining under pressure, our strategy to deliver low prices and the best range and convenience gives us confidence we can be first choice for customers while delivering for our team and shareholders in the year ahead.”
