Woolworths Group (WOW) Q1 2025 TU earnings summary

Executive summary

• Group sales rose 4.5% year-over-year in Q1 FY25 to $18.0B, led by food businesses and e-commerce, with eCommerce sales up 21.2% to $2.4B and value-driven customer focus.

• Trading momentum improved, but H1 earnings outlook is challenged by lower margin sales mix, increased promotions, and elevated supply chain and wage costs.

• Customers remain highly value-conscious, driving increased promotional activity, a shift to lower-priced and Own Brand items, and strong digital engagement.

• The new W Living segment was established, consolidating BIG W, Petstock, Healthylife, and Woolworths MarketPlus.

• Customer value initiatives included more specials, improved own brand availability, and a successful Disney collectible campaign.

Financial highlights

• Australian Food sales grew 3.8% to AUD 13.6B, with item growth of 2.1% and e-commerce up 23.6%.

• E-commerce sales reached AUD 1.952B, penetration at 14.5%, and active B2C customers up 16%.

• New Zealand Food sales up 2.7% to NZD 2.1B, with comparable sales up 3.4% and e-commerce up 15.9%.

• W Living sales increased 17% to $1.36B, reflecting the Petstock acquisition.

• Cartology revenue increased 15% year-over-year.

Outlook and guidance

• H1 FY25 Australian Food EBIT forecast at AUD 1.48–1.53B, below H1 FY24's AUD 1.595B, including AUD 40M incremental supply chain costs.

• Cost-of-living pressures and value-seeking behavior expected to persist, with focus on value, convenience, and supporting teams for Christmas trading.

• Productivity program on track, with further ambition to be stepped up in calendar 2025.

• Wage cost growth to remain elevated; productivity programs to help offset increases.

• October sales growth in Australian Food at ~3%; New Zealand momentum continues; Big W sales flat year-over-year.