Woolworths Group (WOW) H2 2024 earnings summary

Executive summary

• Group sales rose 3.7% year-over-year to $67.9 billion, with e-commerce sales up 18.5% and EBIT before significant items up 1.1%, reflecting a challenging environment with cost-of-living pressures and intense competition.

• NPAT before significant items declined 0.6% to $1.711 billion; after significant items, NPAT dropped 93.3% to $108 million due to a $1.6 billion impairment in New Zealand Food and a $209 million mark-to-market loss on Endeavour Group.

• Australian Food and B2B segments delivered resilient growth, while New Zealand Food and BIG W faced significant EBIT declines but made progress on transformation plans.

• E-commerce and digital engagement, including WooliesX and new digital tools, drove much of the upside, with e-commerce sales nearing $8 billion and penetration up to 12.5%.

• Petstock acquisition completed; proceeds from Endeavour Group stake sale to be returned via special dividend.

Financial highlights

• Group sales reached $67.9 billion, up 3.7% year-over-year; excluding Petstock, sales rose 3.1%.

• Group EBIT before significant items was $3.223 billion (+1.1%); NPAT before significant items was $1.711 billion (-0.6%).

• Basic EPS before significant items declined 1% to 140.3c; after significant items, down 93.3% to 8.9c.

• Australian Food sales grew 3.7% to $50.7 billion; EBIT up 6%, with WooliesX driving three-quarters of EBIT growth.

• New Zealand Food EBIT fell 57% to AUD 108 million, impacted by higher wage costs and competition; BIG W EBIT down 90% due to discretionary pullback and markdowns.

Outlook and guidance

• Early FY 2025 trading shows positive sales momentum: Australian Food up ~3%, New Zealand Food up ~1.5%, BIG W flat for the first 8 weeks.

• EBIT for FY 2025 expected to be above FY 2024, with stronger growth in H2; cost-of-living pressures and wage inflation to persist.

• BIG W and New Zealand Food EBIT expected to improve in FY 2025, contingent on key trading periods and H2 performance.

• Operating capex for FY 2025 forecast at $2.0–$2.2 billion, reflecting ongoing supply chain and store investments.

• Other costs in FY 2025 (excluding Endeavour and Petstock) expected at ~$250 million; higher interest expense anticipated.