Woolworths (WOW) investor relations material

Executive summary

• Group sales increased 3.6% to $69.1bn, with all segments growing, but EBIT declined 12.6% due to lower earnings from Australian Food and BIG W, and one-off impacts such as industrial action and supply chain costs.

• NPAT before significant items was $1.4bn, down 17.1% year-over-year, reflecting lower EBIT and higher financing costs.

• E-commerce, media, rewards, services, and New Zealand operations contributed strongly, while BIG W and Australian Food underperformed.

• Customer sentiment and value perception improved in H2, with positive trends in NPS and value for money scores, but overall performance was below expectations.

• Supply chain transformation and $400m cost savings initiatives progressed, with management restructuring underway.

Financial highlights

• Group EBIT before significant items was $2.8bn, down 12.6% year-over-year; normalized EBIT down 7.8% after adjusting for one-offs.

• Group NPAT before significant items was $1.4bn, down 17.1%; after significant items, NPAT was $963m.

• ROCE/ROFE declined 194 bps to 13.7%; Australian B2B ROCE/ROFE rose 176 bps to 10.8%.

• Australian Food sales up 3.1% (4.5% ex-tobacco), but EBIT down 10.5%; e-commerce sales up 15.9%-17.4%.

• New Zealand EBIT up 40.6% year-over-year; BIG W posted a $35m loss despite 1.1% sales growth.

Outlook and guidance

• Australian Food expected to return to mid to high single digit EBIT growth in FY26, aided by cost savings and cycling of one-offs.

• FY26 will be transitional, with focus on rebuilding momentum and restoring customer trust; medium-term ambition is sustainable mid to high single digit EBIT growth and double-digit TSR.

• Near-term challenges include $80-100m EBIT impact from tobacco regulation and $60m in system replacement costs.

• New Zealand Food transformation to continue; BIG W expected to be EBIT and cash flow positive in FY26.

• Double-digit returns targeted from major supply chain investments by FY30.