Woolworths (WHL) H1 2025 earnings summary

Executive summary

• Group turnover and concession sales rose 5.7% year-over-year to R40.3bn, driven by strong Food business performance but offset by weaker apparel results and transformation costs.

• Adjusted EBIT declined 13.7% to R2.8bn, and adjusted diluted headline EPS fell 19.4% to 169.1cps, reflecting margin pressure and higher operating expenses.

• Sale of Melbourne/Bourke Street property generated a post-tax capital gain of R792m, boosting EPS by 20.9% to 245.4cps and strengthening the balance sheet.

• Net borrowings reduced to R4.7bn, with net debt/EBITDA at 1.37x and ROCE at 17.0%.

• Significant transformation and restructuring underway in apparel divisions, impacting short-term results.

Financial highlights

• Turnover increased 5.4% year-over-year to R39.6bn; group adjusted EBITDA was R4.5bn, down 6.4%; adjusted EBIT at R2.8bn, down 13.7%.

• Adjusted profit after tax declined 20%; interim dividend of 107.0cps declared, down 27.7% year-over-year, maintaining a 70% payout ratio.

• Headline EPS: 152.8cps, down 24.8% year-over-year; adjusted diluted headline EPS: 169.1cps, down 19.4%.

• Return on capital employed at 17%, above cost of capital but lower than last year.

• Positive free cash flow of R600m generated in the half.

Outlook and guidance

• Cautious macro outlook due to global trade risks and persistent cost pressures, especially in Australia.

• Food sales up 12.2% in the first eight weeks of H2; FBH sales up 3% with full price sales up 9.2%.

• Country Road Group sales declined 15.7% in early H2 due to post-Christmas footfall drop.

• Asset impairment review planned for underperforming Country Road Group brands in H2.

• Apparel business benefits from transformation expected to flow more in FY26; medium-term margin targets remain unchanged and are expected to be updated at year-end.