Woolworths Group (WOW) H2 2024 earnings summary

Executive summary

• FY 2024 was marked by a challenging environment with elevated cost-of-living pressures and intense competition, leading to a slowdown in sales momentum in H2, but a recovery in Q4 driven by improved customer focus and value initiatives.

• Group sales rose 3.7% year-over-year to $67.9b, with EBIT up 1.1% and NPAT down 0.6% on a normalised basis.

• eCommerce sales reached ~$8b, now exceeding in-store transactions, and digital engagement continues to drive growth.

• Australian Food and B2B segments delivered resilient growth, while New Zealand Food and BIG W faced significant EBIT declines.

• 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 $3.2 billion (+1.1%); NPAT before significant items was $1.711 billion (-0.6%).

• Basic EPS declined 1% year-over-year to 141.7c.

• 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 sales declined 3.9%, EBIT down 90% due to discretionary pullback and markdowns.

• Significant items included a $1.6 billion impairment in New Zealand Food and a $209 million mark-to-market loss on Endeavour Group.

Outlook and guidance

• Early FY 2025 sales momentum is positive, with Australian Food sales up 3% in the first eight weeks, driven by item growth and modest inflation.

• 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 EBIT expected to improve in FY 2025, contingent on holiday trading and H2 performance.

• New Zealand business expected to take a few years to reach full earnings potential.

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