Woolworths (WHL) H1 2026 earnings summary

Executive summary

• Group sales and turnover grew 6% in constant currency (5.4% in reported terms), outpacing inflation, with all business segments gaining market share and outperforming their sectors.

• Strategic investments in infrastructure, leadership, and operational capabilities have driven improved top-line momentum, sustainable growth, and earnings growth.

• Adjusted EBIT grew just over 4% in constant currency (2.5% reported), while adjusted EBITDA growth was stronger, reflecting operational improvements.

• Cash earnings and free cash flow improved, supported by working capital release, normalization of apparel inventory, and disciplined capital allocation.

• All segments reported positive profit growth, with Food and FBH leading sector sales and returns.

Financial highlights

• Group turnover and concession sales reached R42.5bn, up 6.1% in constant currency and 5.4% reported for the half year ending December 2025.

• Adjusted EBITDA was R4.6bn, up 4.2% in constant currency (3.2% reported); adjusted EBIT was R2.9bn, up 4.1% in constant currency (2.5% reported).

• Adjusted diluted HEPS increased 3.8% in constant currency (0.7% reported); headline EPS rose 9.6% to 167.4cps; interim dividend up 10.3% to 118.0cps, payout ratio at 70%.

• Free cash flow exceeded R2bn, with cash conversion ratio at 110%.

• Net borrowings at R5.8bn; net debt to EBITDA at 1.48x, within internal limits.

Outlook and guidance

• Expect continued improvement in earnings as foundational investments yield results and CapEx cycle peaks.

• Food price movement for H2 expected at 3%-4% (excluding meat); FBH price movement at 3%-3.5%.

• H2 FY26 trading: Food sales +5.4%, FBH +12.1%, CRG +1.6% year-over-year in first eight weeks.

• Focus remains on reducing working capital, improving cash flow, and maintaining a healthy balance sheet.

• Expect continued constrained trading conditions, especially in Australia, despite positive macro indicators in South Africa.